InvestorQ : Can you explain the key steps in placing an intraday trade?
Arusha Ray made post

Can you explain the key steps in placing an intraday trade?

rhea Babu answered.
3 years ago
As an intraday trader, you need to remember 5 very important steps in the process of placing an intraday order…
Firstly, the trader has to clearly define what it is an intraday trade. Only then, the broker will allow the trader to get the higher leverage that is applicable to intraday trading. It is the responsibility of the trader to ensure that the trade that is initiated is closed out on the same day. While the broker will run the RMS system to close out any open orders after 3 pm if any order remains open the losses will have to be borne by the trader.
Secondly, the trader has to further fine tune the order as a cover order or a bracket order. A cover order includes the stop-loss defined at the time of the order. The trader can also place a bracket order which is all about putting a stop loss and profit target at the time of placing the order itself. The bracketing order is an (either-or) order. That means if the stop loss or profit target is triggered, then the other leg of the order is automatically canceled. This is essential to ensure that the system does not implement both the orders leaving you with a net long or net short position in the market.
Thirdly, remember that If you initiated an intraday buy order and the order could not be closed for any possible reason then the trader has to take delivery. Alternatively, if the intraday sell order is closed and the trader does not have shares in the demat account, then it can be worse. The shares will go into the auction and the auction losses will be debited to your account. In both the cases, the losses are borne by the trader. So you are cautious about all your open positions.
At the end of the trading day, the trader will get the contract note which shows the cost of the buy and the sell trades and the associated costs like brokerage, GST, STT, stamp duty, turnover tax etc. The actual profit or loss of the intraday trader will be after considering all these costs, which can be checked in the ledger account.
The intraday trader needs to maintain discipline with respect to placing the right type of orders (market order versus limit order), stop losses and booking profits. Managing risks and monitoring prices is a key requirement in intraday trading. Above all maintain your trade book and make a record of all your intraday trades with the reasons and justifications for the same.