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.