CFD Day Trading

Out of all the different products and trading strategies on the market, contracts for difference (CFDs) have outshined the rest and found their resting place at the top for short term trading amongst speculative traders (otherwise known as day traders) looking to make a short term profit in FOREX, Commodities, Shares or Indexes.

While there is no definitive answer as to the optimum time frame for trading CFDs, the buzz around the world and market movements tell us that intraday has become the method of choice for CFD traders. While some argue that intraday trading is the way to go, sitting at your computer all day watching the ticks in the market and others preach intra-week trading taking longer term positions is the only way to make money, it seems the majority has drifted towards Day Trading.

Your general lifestyle and the amount of time you want to commit to trading will most likely determine which route you want to take. Day trading involves making trades where you hold the security between 2 days to 2 weeks. This style of trading still requires a decent amount of time monitoring the market and is generally recommended that you check your positions 1-2 times a day. Intraday trading however requires constantly monitoring while something like swing trading requires you only check your positions about once a week.

If day trading is going to be the trading style you adapt, contracts for difference are the ideal choice. With the power of leverage allowing you to take large positions, the transparency in price due to the perfect simulation of the underlying asset and the flexibility in product types make it an exemplary choice. Plus the lower commission levels make entering and exiting large volumes of positions much more affordable.

You should understand however that if you do decided to enter day trading there is still  going to be a significant amount of work related to the trading of CFDs and you must be available to monitor your positions daily and at specific times during the day. Particularly the opening and closing times of the market which is where you will see the biggest jumps in price and where you can make the highest profit.