Intraday Trading Time: Importance and Best Time Frames

Intraday trading is a way of making trades in which positions open and close on a single trading day. This type of trading is not only about buying and selling stocks, it needs a profound knowledge of market movements and timings in addition to strategic decision-making. 

In intraday trading, timing is the key factor influencing your success by guiding your decisions on when to enter or exit. Therefore, In this article, we will cover everything about intraday trading time, including market open and close times, the best time frames for intraday trading, and the importance of timing in day trading. So let’s get started!

Intraday Trading Time in India

Intraday trading begins with the pre-market session, which starts at 9:00 AM and ends at 9:15 AM. The main market opens at 9:15 AM and closes at 3:30 PM. Here is the detailed overview of intraday timings:

Intraday Opening Time

The pre-market session will be open from 9:00 AM to 9:15 AM for the traders to place and keep the order, but the real market will be open only from 9:15 AM onwards. 

Intraday Closing Time

Intraday market closing time is 3:30 PM. This is when the market closes for the day, and all positions are closed by this time.

Intraday Square-Off Time

The intraday position square-off time is 3:15 PM.  It is the deadline by which all the intraday trading positions must be closed. It usually takes place 15 minutes before the market closes, If in case a trader fails to square off their positions before the square-off time, the broker would auto square off the position.

Intraday Settlement Time

Intraday settlement in India is usually done after 3:30 PM. While the trades are executed during the market hours, the actual profits of the trades typically occur on a T+1 settlement basis.

Also, check out GIFT Nifty timings if you are an FPO or NRI investing in it.

Importance of Timing in Intraday Trading

• Liquidity: At specific time frames there would be high liquidity which would ensure that the trader can open and close their position at their will, but during the times when the market liquidity is low, it would be hard to trade and gain profits.

• Volatility: A trader can understand the volatility of the market movements by knowing the timing of Intraday Trading. The initial and the last sessions would be highly volatile as they involve a lot of panic buying and non-directional price movements.

• Reduces Risk: Proper timing allows traders to avoid periods of low liquidity or high volatility, reducing the chances of sudden adverse price movements that could result in losses. 

Intraday Time Frames

Best Time for Intraday Trading

Typically, the best time for intraday trading happens within particular times of a trading day. The first hour after the market opens (9:30 AM to 10:30 AM) is often characterized by high volatility and after the initial fluctuations the directions of the market would be easy to identify. Usually, beginner traders tend to wait for the markets to show this direction before entering a position, whereas experienced traders try to take advantage of the initial volatility to make profits.

Another key timeframe is during the last hour before a market closes (2:30 PM to 3:30 PM). In this case, traders will be closing their positions thereby causing volatility to increase drastically along with chances of making more trades to square off their positions. On the other hand, it could also lead to risks since sudden price changes may result in unplanned losses. The starting 15 minutes and the last 15 minutes would be highly risky to enter for beginner-level traders.

Which Time Frame Is Best for Intraday Trading: 5-Minute or 15-Minute?

5-minute Time Frame

The 5-minute time frame is popular among intraday traders for spotting trends and entry/exit signals with reduced noise from short-term fluctuations. It provides a more stable view of the market.

15-minute Time Frame

The 15-minute time frame offers a broader perspective, helping traders identify longer-term trends throughout the day, making it ideal for those looking to take a more cautious and strategic approach.

What is the 11 AM Rule in Intraday Trading?

The 11 AM Rule is a trading strategy that suggests the market typically establishes a clearer direction by 11 AM. By this point, the early morning volatility, driven by news, investor reactions, and overnight market developments, tends to settle. The market begins to stabilize, making the trends more predictable. Traders who follow this rule believe that the trend set around 11 AM can offer valuable insights into the market's direction for the remaining day. This rule helps traders avoid the unpredictability of the opening hours and make more informed decisions based on the direction the market is likely to take. In addition to this, it also states that if a trending stock reaches a new high between 11:15 to 11:30 AM, there's a 75% likelihood it will close within 1% of the day's high.

What is Intraday Square Off Time?

The time of intraday square-off is the cut-off time, by which all positions should be closed for the day. In most stock markets, particularly in India, the time is usually set around 3:15 PM, i.e.15 minutes before the end of the market hours. If any positions are not squared off at that time, then they are auto squared off by the broker for which the trader will be charged some penalty fee as well. This is done so that traders do not carry their intraday positions into the next day, thereby avoiding risks associated with holding stocks after the close of the trading day (aftermarket).

How to Start Intraday Trading in India

• Educate Yourself: Understand the basics of the stock market, study technical analysis, and explore different intraday trading strategies to build a solid foundation before you begin trading.

• Choose a Broker: Select a reliable broker like Rupeezy that offers low fees, fast execution, and essential tools like real-time charts and technical indicators to make your trading easy.

• Set Up a Trading Account: Open a trading account with your broker and complete any necessary registration and KYC requirements to start trading.

• Develop a Trading Plan: Create a detailed trading plan that matches your strategies for intraday trading, including entry and exit positions, stop-loss levels, and risk management rules.

• Monitor the Market: Stay informed by keeping track of market news, economic data, and events that could impact stock prices, providing you with trading opportunities.

• Stay Disciplined: Maintain discipline by following your trading plan, avoiding emotional decisions, and continually working on improving your trading skills.

Conclusion

As discussed above, intraday trading has been shown to involve a lot of precision timing, strategy, and discipline. Furthermore, success comes out of understanding market movements, picking suitable time frames, and adhering to a structured plan. To earn maximum profit it is necessary to make the right decisions considering your risk appetite and capital or else one might end up making huge losses. 

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