Is Intraday Trading profitable?

Key takeaways

• Intraday trading can be profitable, but SEBI's FY23 data shows that 71% of intraday traders lost money, and 54% of those who had traded for three years were still making losses.
• Charges apply to every trade. At Dhan's rates, buying and selling ₹1,00,000 worth of shares intraday costs about ₹83, so the stock must move about ₹0.41 per share in your favour before you make any profit.
• Risking only 1% of your capital per trade, always using a stop-loss and aiming for a reward-to-risk ratio of at least 1:2 can help you manage losses.
• Intraday profits are taxed as speculative business income at your slab rate and reported in ITR-3. Losses can be carried forward for four years if you file your return on time.

Every market has stories of people making a fortune in a single day. You rarely hear about the much larger number of people who lose money.

Buying and selling a stock on the same day can look easy. You buy at ₹500, sell at ₹505 and keep the profit.

But is intraday trading profitable? It can be for a small number of disciplined traders, but most traders lose money. This guide covers what the numbers show, why most traders lose and what a realistic plan looks like if you decide to trade.

What do the numbers say about intraday trading profits?

The Securities and Exchange Board of India (SEBI) studied intraday trading by individuals in the equity cash segment for FY23. The results are stark.

• 71% of individual intraday traders ended the year with a net loss.
• Among traders under 30, 76% made a loss.
• Among traders who made more than 500 trades in the year, 80% made a loss.
• Among traders who had traded intraday in all three years studied, 54% were still making losses.
• Loss makers paid trading costs equal to a further 57% of their trading losses.

About one in three individuals who trade in the equity cash segment trades intraday. The number of intraday traders grew by more than 300% between FY19 and FY23.

Futures and options tell a similar story. SEBI's latest study found that 90.9% of individual traders lost money in FY25, with net losses of about ₹1.12 lakh crore. In FY26, the share of loss-making traders fell to 87.7%.

Making a profit is still possible. About three in ten intraday traders in the cash segment made a profit in FY23, and traders who had traded for longer were less likely to make losses.

Therefore, the answer becomes a conditional one. Intraday trading can be profitable for a select minority who control their costs and risks. The rest of this guide will explain how to do so.

Why do most intraday traders lose money?

Here are four common reasons why traders lose money.

Trading excessively

According to SEBI's study, loss makers traded more often than profit makers. Trading more increases your costs and the chances of making bad decisions.

Trading using leverage without a stop-loss

Most brokers offer intraday margin, so a ₹20,000 balance can control a ₹1,00,000 position. A 2% fall in that position is a ₹2,000 loss, which is 10% of your margin.

Without a stop-loss order, one bad trade can undo all your profits for the week.

Neglecting the cost involved

Brokerage, taxes and charges are levied regardless of the outcome of the trade. The following section explains this cost.

Trading to get your losses back

After a loss, many traders increase their trade size to recover it. In SEBI's latest derivatives study, about 88% of traders with cumulative losses above ₹10 lakh kept trading.

How much do costs reduce your intraday profit?

Unlike risks, costs are something you can estimate before you trade. Say you buy 200 shares at ₹500 and sell them at the same price, so each side of the trade is worth ₹1,00,000. The charges below are Dhan's rates for equity intraday trades on NSE.

• Brokerage is ₹20 per executed order or 0.03% of the trade value, whichever is lower. For an order value of ₹1 lakh, 0.03% amounts to ₹30, but since the flat brokerage of ₹20 is lower, you pay ₹20 per order. For two executed orders (buy and sell), the total brokerage is ₹40.
• Transaction charge of 0.0030699% on the total buy and sell value of ₹2,00,000 comes to about ₹6.14.
• Securities transaction tax of 0.025% on the sell side comes to ₹25.
• Stamp duty of 0.003% on the buy side comes to ₹3.
• SEBI turnover fee of 0.0001% on ₹2,00,000 comes to about ₹0.20.
• GST at 18% on brokerage, transaction charge and SEBI fee comes to about ₹8.34.

The total comes to about ₹83. Your stock has to move about ₹0.41 per share in your favour before you make your first rupee.

Scaling it up, 10 such round trips a day for 20 trading days come to about ₹16,500 per month, even if your stock price ends up where it started.

If Dhan squares off your intraday position at its auto square-off time, it charges ₹20 + GST per order. Exit on your own before then to avoid this charge.

Check the current rate card or brokerage calculator before you trade.

Which numbers decide if you make a profit?

Two numbers matter most. The first is your win rate, which is the percentage of your trades that make money. The second is your reward-to-risk ratio, which compares what you could gain on a trade with what you could lose.

The table below shows the win rate you need to break even, before costs.

A trader who wins 40% of trades with a 1:2 ratio has an outcome of (0.4 × ₹2,000) − (0.6 × ₹1,000), which is a profit of ₹200. With a 1:1 ratio, the same win rate gives a loss of ₹200.

Costs push each of these break-even win rates higher, so aim for trades with a reward-to-risk ratio of at least 1:2.

What is a realistic intraday trading plan?

Here is a simple plan you can follow.

Fix your capital

Use only money you will not need in the next 12 months. A starting capital of ₹50,000 to ₹1,00,000 is reasonable. With a much smaller account, fixed costs like the ₹20 brokerage take up a larger share of each trade.

Select liquid stocks

Start with Nifty 50 stocks. They have high volumes and narrow spreads, so your orders usually fill close to the quoted price. Choose stocks that usually move at least 1% in a day, so there is enough room to cover costs.

Size every trade according to risk

Let us assume that your capital is ₹1,00,000, and you risk 1% per trade, which is ₹1,000. You want to buy at ₹500 and have a stop-loss at ₹495. Thus, each share risks ₹5.

₹1,000 divided by ₹5 gives you 200 shares. Set the target at ₹510, which gives you a reward-to-risk ratio of 1:2.

If the target is hit, you make ₹2,000 before costs, or about ₹1,917 after costs of about ₹83. If the stop-loss is hit, you lose ₹1,000 plus about ₹82 in costs.

Place the stop-loss when you place the entry order, so your exit does not depend on your mood. Dhan also offers a trailing stop-loss, which moves your stop-loss up as the price rises.

Set daily limits

Take no more than three trades a day. Stop for the day after two losing trades, or if you lose 2% of your capital, which is ₹2,000 on ₹1,00,000.

While you are learning, avoid trading in the first 15 minutes after the market opens at 9:15 AM, as prices can swing sharply. Close all positions on your own before your broker's auto square-off time, which is 3:10 PM for equity intraday on Dhan.

Practice before going live

Do at least 50 to 100 paper trades first. For each trade, write down your entry, stop-loss, target, exit and the reason you took it.

Review every 100 trades

Calculate your win rate, average win, average loss and total costs. If your net result after costs is negative, change your plan before you increase your trade size.

If your results are positive for three months in a row, increase your position size slowly, by no more than 25% at a time. This is a general rule, not a guarantee of profit.

How is intraday trading profit taxed?

Profit from intraday trading is treated as speculative business income, not capital gains. It is added to your total income and taxed at your slab rate.

You report this income in ITR-3. Intraday losses can only be set off against speculative income, and they can be carried forward for four tax years if you file your return by the due date.

Income from futures and options is non-speculative business income, and its losses can be carried forward for eight years. Whether you need a tax audit depends on your turnover, so speak to a tax professional.

Conclusion

Intraday trading can be profitable, but only a minority of traders manage it. SEBI found that profit makers traded less often than loss makers. Keeping costs in check, risking a small part of your capital on each trade and always using a stop-loss can help you avoid the mistakes that cause most losses.

Practice first, analyse the results of every 100 trades, and file your taxes correctly. If the numbers are not working in your favour, it would be wise to stop.

FAQs

Is intraday trading profitable for beginners?

Usually not. SEBI found that 76% of intraday traders under 30 made losses in FY23. Among all traders who had traded for three years, 54% were still making losses. Paper trading and small position sizes can help you learn with less risk.

What is the minimum capital for intraday trading?

There is no fixed minimum. Your broker's margin requirement decides the smallest trade you can place. In practice, a very small account struggles to cover costs.

Is intraday trading better than delivery trading?

Neither is better, as they serve different purposes. Delivery trades have no brokerage on Dhan and are taxed as capital gains. Intraday trades have brokerage and are taxed as speculative business income, but you don't hold any position overnight.

Should beginners start with options for intraday trading?

No. In its latest derivatives study, covering FY25 and FY26, SEBI found that 97% of traders in its sample were mainly options buyers. Options made up 92% of individual traders' losses. Beginners can start with liquid stocks in the cash segment instead.