If you are searching for day trading opportunities, then the contracts for difference also known as CFD trading would be ideal. That is because this system is designed to net short-term quick profits for traders looking to trade in stocks, commodities or also Forex.
You will find varied views though. Some choose to trade CFDs for a longer period like a week rather than to use the terminal and watch ticks all day. Others believe that by watching the screen and executing quick trades, you increase your chances of producing very good profits regularly.
The choice is dependent upon the time you would like to devote to such trading. Both need you to check your positions regularly, though it must be said that daytrading involves and demands a lot more of the attention.
The advantage with stock investing of CFDs is the flexibility provided to take larger positions, the reduced commissions you need to pay for and the actual transparency in the pricing mechanism. But you need to be in a position to take advantage of the opening and closing times of the market since the price volatility is the maximum at those times.
Swing trading on the other hand can be defined as an option between day trading as well as short term trading. It is when traders hold on to the CFDs for about 2 to 3 weeks and continue to reap some benefits of the price fluctuations occurring in that period.
You can do well at swing trading if you can grab the right CFDs. These are generally often the large cap stocks which are very actively traded and you may get price movements taking place such that you are able to consider positions accordingly. This would let you make the most of price movements on either side since you would be holding positions for many days. Swing trading appears to favor carrying any one position at a time – you can be either long in a bull market or short in a bear market and because you have the good thing about time working for you, you can ride the directional wave of the market for that point before changing positions.
The swing trader thus benefits when there is an absolute pattern accompanied by the market instead of very quick fluctuations in price. That is good for the day trader that is nimble together with his trade and in a position to seize instant opportunities regardless of having to pay brokerage firms on every trade that he or she executes.