Day-Trading
Day trading is the practice of buying and selling financial instruments such as shares, foreign exchange or futures within the same trading day. Positions are usually closed before market close of the trading day..
Day trading is the practice of taking small bites, or profits, out of the market. A day trader would look to profit from a price move from say $6.20 to $6.22, $6.34 to $6.36 or $6.64 to $6.66. Positions are rarely held overnight but are sold before the market close, and possibly even re-purchased the following day. Day trading is especially tempting for newcomers to CFDs who - often nervous about having large sums at stake - are quick to hit the sell button at the mere whiff of a profit.
Experienced traders rarely engage in day trading. Instead, they prefer to hold positions for days or even several months if the trend permits. They might look to open the position at $6.20 and ride the trend out to, say $6.66, or higher.
RELATED TERMS
TheBull's free daily and weekly newsletters
Click here to receive Ahead Of The Curve - a free daily market preview - or the hugely popular RunWithTheBull - a free weekly newsletter on stocks, trading, investing, super and more.
- 09.02.2012 Oil Search to book $US33m Kurdistan charge
- 09.02.2012 Rio cautious after write-down hacks profit
- 09.02.2012 European stocks rise at open
- 09.02.2012 Stockland profit dives 28%
- 09.02.2012 James Hardie goes into trading halt
- 09.02.2012 Chinese inflation data sends $A lower
MoreRELATED ARTICLES
Options Shorting Strategies for Beginners
As an options seller you do not want to expose yourself to too much time risk, since the magnitude of an adverse move could increase on a longer time frame.
How are CFDs taxed?
Stephen Calder clears up the confusion surrounding the tax treatment of CFDs.
Diamonds: The Missing Commodity Derivative
While they may be "a girl's best friend", diamonds haven't made it to the futures market - yet.
MoreASK THE EXPERT - CFDs
How do I trade CFDs over international shares?
View answer.
When is the best time to trade CFDs?
View answer.
What is momentum trading? And how does it work?
View answer.
RESOURCES & OFFERS
