Intraday strategy for small capital

Best Intraday Trading Strategy for Small Capital Profit (Ultimate Guide for Beginners & Budget Traders)

Intraday trading with a small capital isn’t about finding the fastest profit — it’s about risk-controlled consistency. When your capital is limited, your number one priority is capital protection followed by scalable profitability.

This comprehensive guide gives you a battle-tested strategy using Moving Averages and RSI, perfect for small capital traders who want to grow without blowing up their accounts.

Strategy Objective

• Target: ₹200–₹1,000 daily profit on ₹10K–₹50K capital

• Tools: Simple technical indicators (Moving Averages + RSI)

• Style: Trend-following + momentum confirmation

• Risk per trade: Max 1-2% of capital

• Time frame: 5-minute intraday charts

Step-by-Step Strategy Breakdown

Step 1: Stock Selection – Focus on Liquidity & Movement

Choose stocks that:

• Trade above 1 million shares per day.

• Have tight bid-ask spreads (better entry/exit prices).

• Show intraday volatility of 2-5% (enough movement to hit targets).

Examples:

• NSE/BSE: Tata Motors, ICICI Bank, HDFC Life, Infosys

• US Markets: AAPL, AMD, PLTR, TSLA (for global traders)

Tip: Stick to 3–5 stocks daily and track them closely. Become an expert in their behavior.

Step 2: Chart Setup – Keep It Clean & Focused

Use a 5-minute candle chart. Add:

• 20-period Moving Average (MA20) – fast trend

• 50-period Moving Average (MA50) – slow trend

• RSI (Relative Strength Index) – 14-period for momentum (set overbought at 70, oversold at 30)

This combo filters out sideways noise and provides solid trade signals.

Step 3: Identify the Trend First

For Buy Trades:

• MA20 > MA50 (bullish alignment)

• Both MAs sloping upward

• Price above both MAs

For Sell Trades:

• MA20 < MA50 (bearish alignment)

• Both MAs sloping downward

• Price below both MAs

Avoid trading when MAs are flat or crossing repeatedly — it’s a sign of a sideways/consolidation market.

Step 4: Entry Confirmation Using RSI

Now confirm trend with RSI:

For Long Entry:

• RSI crosses above 30 (from oversold zone)

• Price forms a bullish candlestick (e.g., hammer, bullish engulfing)

For Short Entry:

• RSI crosses below 70 (from overbought zone)

• Price forms a bearish candlestick (e.g., shooting star, bearish engulfing)

Using RSI avoids false breakouts and gives you entry during real momentum shifts.

Step 5: Set Stop Loss and Target – Be Ruthless

• Stop Loss: Set just below the recent swing low (for buys) or above the swing high (for sells)

• Target: Set at 2x or 3x your stop loss

Example:

• Entry: ₹100

• Stop Loss: ₹89

• Target: ₹122 or ₹133

This ensures that even with only 50% win rate, you’ll be profitable.

Step 6: Calculate Position Size Based on Capital

Let’s say your capital is ₹20,000 and you risk 1.5% per trade:

• Risk per trade = ₹300

• Stop loss = ₹1

• Shares to trade = ₹300 / ₹1 = 300 shares

NEVER risk more than 2% of your capital per trade.

With proper sizing, your account survives and grows gradually.

Step 7: Manage the Trade Live – Trailing Stops

• If the trade moves 50–70% in your favor, move stop loss to breakeven

• Or use a trailing stop to lock profits while allowing more upside

Example:

• Entry ₹100, Target ₹104

• Price hits ₹102, move SL from ₹99 to ₹100 (no loss zone)

This lets winners run while cutting losers fast — key to long-term profitability.

Step 8: Exit Discipline – Stick to the Plan

• Exit fully when target hits.

• Exit immediately if stop loss is hit — NO EXCEPTIONS.

• If price goes sideways and fails to move for over an hour, consider exiting manually near cost.

Avoid greed — don’t hold hoping for more.

Step 9: Journal Every Trade

Log these details:

• Stock name & time

• Entry price, stop loss, target

• Indicator signals

• Profit/loss

• What went right/wrong

Your journal is your personal trading coach.

Step 10: Refine, Repeat & Scale Gradually

• Review your journal every weekend.

• Identify which setups work best.

• Cut out weak entries and focus on what makes you money.

• Once consistent, scale position size slowly, not suddenly.

Strategy Summary Table

Key Advantages for Small Capital Traders

• Minimal indicators = simple and fast

• Works well on ₹10K to ₹50K accounts

• Avoids overtrading

• Easy to track and journal

• Highly scalable once consistent

Mistakes to Avoid

• Trading without a stop loss

• Overtrading or revenge trading

• Risking more than 2% per trade

• Trading low-volume stocks

• Ignoring the broader market trend

Final Thoughts

If you’re a small-capital trader, your superpower is discipline — not big bets. This intraday strategy is powerful because it’s simple, consistent, and grounded in trend logic and momentum. With time, a small account can become a large one — but only if you protect your capital while aiming for high-probability trades.

Focus on small, consistent profits. Stack wins, learn from losses, and scale gradually.