About Day Trading CFDs: What Are The Tips To Succeed With CFD Trading Intra Day?

If you're considering CFD day trading instead of trading with CFD positions that are held over several days, here are some things to consider.

Features of day trading include:

1. No overnight market exposure.

That is, you don't expose yourself to the risk of a stock or share and hence the CFD gapping up or down overnight. If this gapping occur against you, then you can exit at a position at a much different price than your intended exit, which is slippage.

2. No interest cost for long CFD positions.

If you hold long CFD positions overnight, then you are charged an interest amount, which is usually a reference rate such as the LIBOR or the RBA cash rate, plus a certain number of percent, depending on the broker. In intraday trading, you will not have to pay these.

3. Able to get short term results.

You're in the position for a short time. This is in contrast to longer term trading, where there may be fewer trades, and the trades that are entered typically stay in the position for weeks and even months.

Now the difficulties of day trading are:

1. You need to watch the screen continuously or nearly continuously.

Day trading means that you are shorter time frames, so you will need to be at the screen during the day. This means that you should have a block of time that you can use to trade your strategy with.

2. Need to make decisions faster, so you need to know your system very well.

You need to know your system well, and make decisions in minutes. Also be prepared with your platform and know how it works so that you can enter and exit trades without mistakes.

3. Usually will catch smaller moves, so to make profits and overcome fixed costs, will need to have a larger float or use more leverage.

Smaller moves occur compared to long term trading. Also, note there are commissions with most CFD providers to get in and out of trades, so your trade will have to overcome fixed costs when profiting from moves in the market.


All trading involves a high risk of financial loss, and the information on this site is for general information purposes only and is not financial advice in any form. Seek your own financial advice before taking any action.

All forms of trading involves risk of financial loss.

Also note that CFD trading is not legally permitted in some countries.

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