Intraday Trading with CFDs

Posted By Robert On Tuesday, May 5th, 2015 With 0 Comments

CFD intraday trading can be an exciting and profitable activity. Intraday trading refers to holding a CFD position only while the market is open for that particular day. That means you buy it after 10am and sell it before 4pm the same day. Rarely will someone who focuses on intraday trading hold a CFD for a night as this will conflict with their trading strategy. Intraday trading can be very profitable and there are many professionals who work inside of banks and trading firms who do this for a living, the downside however is that it is very fast paced and you have to be at your desk glued to your screen to really maximise the benefits of this strategy. It is also very time intensive making it hard for people with day jobs to manage (unless you want to stay up all night and trade overseas markets).

If you do decide to go down the intraday trading route, CFDs are a perfect tool to achieve this. They are a leveraged product firstly which means large positions can be opened for a fraction of the cost, usually 5-20% of the position. This allows you to maximise small ticks in the price of stocks through the day ensuring the most profitable returns.

CFDs are also available on a wide variety of financial products, allowing the trader to select they type of product they favour most and the product they have the greatest experience and knowledge with. You can trade FOREX, commodities, indices and shares in multiple markets.

It is also very simple to go short with a CFD. Thus if you get a read on a particular stock or currency that is negative, you can maximise on that opportunity too. Something that was very difficult in the past when dealing with standard shares. This factor alone basically doubles the opportunity to make money intraday trading.

The fact that you are not holding a CFD overnight can also be beneficial as it removes you from the risk of the large price movements that typically occur overnight. Plus CFDs charge interest on long positions, but only when the CFD is held overnight so intraday trading will remove the risk from this practice.

Rarely will any underlying asset change greatly in price over the course of a single day. Thus to be profitable in intraday trading it is important to control very large quantities of stocks.  If you do not have large starting capital it would be impossible to access the kind of profits that CFDs provide any other way.

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