CFD Day Trading

As a type of agreement that allows traders to speculate on the price of an underlying asset without owning it, contracts for difference (CFDs) are an ideal option for day traders. The market for CFDs has flourished since these derivatives became available to UK investors in the 1990s, with rapid growth in recent years bringing the monthly average number of UK CFD traders to over 560,000 in 2020. This guide will provide investors with all they need to know about CFD day trading in the UK, from strategies to the best online brokers.

Top UK CFD Brokers List

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Found 68 Brokers
Leading forex and CFD broker since 2006, regulated in Ireland, Australia, Canada, Japan, Abu Dhabi, and South Africa. AvaTrade offers multiple trading platforms, including MT4/5, Web Trader, Mobile App, Vanilla options and Social Trading. +1250 Financial Instruments, Educational content and multilanguage customer support active 24/7. 20% Welcome bonus available on allowed countries.
FTSE Spread
0.5 pt
GBPUSD Spread
1.0 var
Oil Spread
0.02
Stocks Spread
0.13 Abv Market
FCA Regulated
No
MT4 Integration
Yes
Trade on a range of CFDs with competitive spreads and leverage
FTSE Spread
Variable
GBPUSD Spread
1.0 pip average
Oil Spread
Variable
Stocks Spread
NA
FCA Regulated
No
MT4 Integration
Yes
XTB is one of the largest stock exchange-listed FX & CFD brokers in the world, offering access to over 2000 instruments on their trading platforms.
FTSE Spread
0.08%
GBPUSD Spread
0.1 pips
Oil Spread
0.03
Stocks Spread
0.2% Var
FCA Regulated
Yes
MT4 Integration
No
Reliable and affordable trading since 2009. Join over 900,000 others trading on 400+ CFD products over assets like forex, gold, indices, cryptocurrency and shares from 0.0 spreads through TradingView, MT4 or MT5. Vantage is ASIC regulated and client funds are segregated. Open an account in under 5 minutes.
FTSE Spread
1 pt
GBPUSD Spread
0.0 via ECN
Oil Spread
2.8 pips (Var)
Stocks Spread
FCA Regulated
Yes
MT4 Integration
Yes
Trade CFDs on popular indices, shares, forex, crypto & commodities. Award winning platform, zero commission, free education and low spreads.
FTSE Spread
1.2
GBPUSD Spread
1.0 but 0.0 on Raw Account
Oil Spread
1.0
Stocks Spread
1.0
FCA Regulated
No
MT4 Integration
Yes
XM.com Offer a range of Account types and a low minimum deposit to appeal to all levels of trader. With 1000+ markets and low spreads they offer a great service.
FTSE Spread
1.5 pts (var)
GBPUSD Spread
2.1 (var)
Oil Spread
0.05 (var)
Stocks Spread
0.1% Var
FCA Regulated
No
MT4 Integration
Yes
Trade Forex on 0.0 pip spreads with the world's leading True Raw forex broker - IC Markets.
FTSE Spread
1 pt
GBPUSD Spread
0.5 pips
Oil Spread
1 pt
Stocks Spread
FCA Regulated
No
MT4 Integration
Yes
Axi is a global online FX and CFD trading company, trusted by 60,000+ ambitious customers in 100+ countries around the world.
FTSE Spread
1 pt
GBPUSD Spread
1.1 pips
Oil Spread
3 pips
Stocks Spread
FCA Regulated
Yes
MT4 Integration
Yes
Trade CFDs in a range of financial markets.
FTSE Spread
2
GBPUSD Spread
1.5
Oil Spread
0.13
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
No
Skilling are an exciting new brand, regulated in Europe and beyond, with a bespoke browser based platform, allowing seamless low cost trading across devices.
FTSE Spread
2 pts
GBPUSD Spread
0.5 pips
Oil Spread
6 pips
Stocks Spread
0.1% Each Side
FCA Regulated
No
MT4 Integration
Yes
Capital.com offer CFDs and Forex CFDs on a huge range of assets, with competitive spreads and zero commission on unique platforms, including the fully functional mobile app.
FTSE Spread
1.3 pt
GBPUSD Spread
1.3 pips
Oil Spread
0.06 pips
Stocks Spread
0.1% Var
FCA Regulated
Yes
MT4 Integration
Yes
Trade CFDs with up to 1:2000 leverage.
FTSE Spread
N/A
GBPUSD Spread
2
Oil Spread
5.2
Stocks Spread
From 0.1
FCA Regulated
No
MT4 Integration
Yes
FXChoice offers leveraged CFD products on a breadth of financial markets.
FTSE Spread
1.25
GBPUSD Spread
98 - 107
Oil Spread
30 - 49
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Fusion Markets are delivering low cost forex and CFD trading via low spreads and trading costs. Their message is - Stop paying too much to trade
FTSE Spread
1.56 pts (Ave)
GBPUSD Spread
0.64 (Ave)
Oil Spread
3.1 pips (Ave)
Stocks Spread
FCA Regulated
No
MT4 Integration
Yes
easyMarkets.com - Simply Honest. Trade CFDs on Forex, Commodities, Indices, Shares & Cryptos With a Top Rated Forex Broker
FTSE Spread
GBPUSD Spread
0.9 (MT4)
Oil Spread
3 pips
Stocks Spread
0.1% Var
FCA Regulated
No
MT4 Integration
Yes
Trade CFDs on oil, currencies, indices, and stocks
FTSE Spread
-
GBPUSD Spread
From 0.1
Oil Spread
From 0.0
Stocks Spread
From 0.0
FCA Regulated
No
MT4 Integration
Yes
Invest in the markets with online CFDs.
FTSE Spread
0.77
GBPUSD Spread
1.3
Oil Spread
0.09
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Diversify trading portfolios with contracts for difference available on multiple financial markets.
FTSE Spread
From 0.4
GBPUSD Spread
From 0.6
Oil Spread
From 3.0
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
Yes
Finq.com offers highly leveraged CFD products
FTSE Spread
2.0 pts
GBPUSD Spread
From 1.0 pip
Oil Spread
5.0 pips
Stocks Spread
<0.25%
FCA Regulated
No
MT4 Integration
Yes
CFDs are available across multiple financial markets.
FTSE Spread
Not offered
GBPUSD Spread
0.9 pips
Oil Spread
4-15 pips
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
No
FXTM is a leading forex and CFD broker. Offering a huge range of markets and 6 account types, they cater to all levels of trader.
FTSE Spread
1.3 pts
GBPUSD Spread
0.3 (var)
Oil Spread
9 pts (var)
Stocks Spread
0.1% Var
FCA Regulated
No
MT4 Integration
Yes
Trade CFDs on forex, indices, shares, precious metals, and energies.
FTSE Spread
1 - 2.3
GBPUSD Spread
0.0 - 1.5
Oil Spread
Variable
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
CFDs are available on multiple markets, including FX, indices, shares, commodities & cryptocurrency
FTSE Spread
0.7
GBPUSD Spread
0.4
Oil Spread
0.03
Stocks Spread
From 0.4
FCA Regulated
Yes
MT4 Integration
Yes
Markets.com offer CFDs across a huge range of assets from shares and indices to commodities and cryptocurrencies.
FTSE Spread
2 pips
GBPUSD Spread
1.3 pips (var)
Oil Spread
0.05
Stocks Spread
4 pips
FCA Regulated
Yes
MT4 Integration
Yes
IG offer spread betting, CFD and Forex trading across a range of markets. They are FCA regulated, boast a great trading app and have a 40 year track record of excellence.
FTSE Spread
1 pt
GBPUSD Spread
0.9 pips
Oil Spread
3 pips
Stocks Spread
0.1% Var
FCA Regulated
Yes
MT4 Integration
Yes
IronFX offers online trading in forex, stocks, futures and commodities
FTSE Spread
GBPUSD Spread
Oil Spread
Stocks Spread
FCA Regulated
No
MT4 Integration
Yes
Dukascopy is a Swiss-based forex, CFD, and binary options broker
FTSE Spread
166
GBPUSD Spread
N/A
Oil Spread
5.1
Stocks Spread
Start from 0.1
FCA Regulated
No
MT4 Integration
Yes
CFDs are supported for US stocks, equity indices, currency indices, energies and metals.
FTSE Spread
5
GBPUSD Spread
0.5
Oil Spread
3
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
Yes
CMC Markets is headquartered in London and listed on the LSE (FCA Regulated). It offers competitive spreads on a global range of assets via its Next Generation platform.
FTSE Spread
1 pt
GBPUSD Spread
0.9
Oil Spread
3.0
Stocks Spread
.10% Var
FCA Regulated
Yes
MT4 Integration
Yes
Go long and short on popular financial markets via the RaceOption platform
FTSE Spread
Floating
GBPUSD Spread
Floating
Oil Spread
Floating
Stocks Spread
Floating
FCA Regulated
No
MT4 Integration
No
TMGM offers a massive range of CFD instruments, encompassing more than 12,000 global equities, indices, currency pairs and commodities
FTSE Spread
4.0
GBPUSD Spread
1.4
Oil Spread
0.0
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Anzo Capital clients can use MetaTrader 4 to trade CFDs on stocks, equity indices, crude oil and precious metals with competitive price levels.
FTSE Spread
1.1
GBPUSD Spread
0.3
Oil Spread
0.0
Stocks Spread
N/A
FCA Regulated
No
MT4 Integration
Yes
Rockfort Markets clients can trade a range of CFDs with high leverage rates, covering crypto, forex, commodity and international equity markets.
FTSE Spread
GBPUSD Spread
0.6
Oil Spread
Variable
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Trade CFDs on stocks, indices and commodities.
FTSE Spread
Not Available
GBPUSD Spread
From 0.5 pips
Oil Spread
From 1.6 pips
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
AdroFX offers margin trading on CFDs across popular financial markets.
FTSE Spread
From 9.0
GBPUSD Spread
From 0.5
Oil Spread
N/A
Stocks Spread
From 5.0
FCA Regulated
No
MT4 Integration
Yes
Trade thousands of different assets with leveraged contracts for difference.
FTSE Spread
0.5
GBPUSD Spread
2.0
Oil Spread
4.4
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Contracts for difference are offered on popular financial markets with tight spreads.
FTSE Spread
1.0
GBPUSD Spread
0.6
Oil Spread
3.5
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
Yes
Buy and sell across the financial markets with leveraged CFD products.
FTSE Spread
0.84
GBPUSD Spread
0.64
Oil Spread
1.6
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
CFDs are available on multiple financial markets including FX, indices & shares.
FTSE Spread
0.50
GBPUSD Spread
2.3
Oil Spread
0.05
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
Yes
CFDs are available on hundreds of markets including FX, indices, shares, & commodities.
FTSE Spread
1.7 - 2.95
GBPUSD Spread
0.8
Oil Spread
0.03 - 0.08
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
Yes
Buy and sell CFDs on the financial markets.
FTSE Spread
10.4
GBPUSD Spread
0.8
Oil Spread
5.2
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Trade CFDs with tight spreads and leverage.
FTSE Spread
11.9 - 12.0
GBPUSD Spread
0.1 - 1.8
Oil Spread
0.12 - 0.19
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Leveraged CFDs are available in several financial markets.
FTSE Spread
0.9
GBPUSD Spread
1.3
Oil Spread
0.02
Stocks Spread
N/A
FCA Regulated
Yes
MT4 Integration
Yes
Leveraged CFD products are available in multiple financial markets.
FTSE Spread
1.3
GBPUSD Spread
1.2
Oil Spread
0.03
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Trade leveraged CFDs on a range of financial markets
FTSE Spread
From 0.1
GBPUSD Spread
From 0.1
Oil Spread
From 0.1
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
Yes
Trade on contracts for difference with up to 1:30 leverage.
FTSE Spread
0.2
GBPUSD Spread
1.1
Oil Spread
0.01
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Trade CFDs with up to 1:30 leverage in multiple markets.
FTSE Spread
2
GBPUSD Spread
2
Oil Spread
0.04
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
Yes
Trade thousands of CFDs across a range of markets with up to 1:500 leverage.
FTSE Spread
0.31
GBPUSD Spread
0.49
Oil Spread
0.03
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
CFDs are available on thousands of markets, including forex, indices, shares, and commodities
FTSE Spread
0.8
GBPUSD Spread
1.3
Oil Spread
0.03
Stocks Spread
0.5
FCA Regulated
Yes
MT4 Integration
Yes
Zero Leverage Digital CFDs have a daily fee of approx. 1 pip and forex CFDs leverage up to 1:40
FTSE Spread
N/A
GBPUSD Spread
0.9
Oil Spread
N/A
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
No
Trade on a range of leveraged CFD products at HYCM.
FTSE Spread
Not offered
GBPUSD Spread
From 0.1 + $4 per round
Oil Spread
From 2 pips
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
Yes
Trade CFDs on currency pairs, indices, & commodities with tight spreads.
FTSE Spread
1.2
GBPUSD Spread
0.2
Oil Spread
4
Stocks Spread
N/A
FCA Regulated
Yes
MT4 Integration
Yes
Trade online CFDs with up to 1:30 leverage.
FTSE Spread
0.9
GBPUSD Spread
0.4
Oil Spread
50
Stocks Spread
0.02 USD
FCA Regulated
Yes
MT4 Integration
Yes
Trade CFDs with leverage across multiple markets.
FTSE Spread
N/A
GBPUSD Spread
0.5
Oil Spread
0.05
Stocks Spread
Variable
FCA Regulated
Yes
MT4 Integration
Yes
Trade CFD products in financial markets.
FTSE Spread
1
GBPUSD Spread
Floating from 0
Oil Spread
0.3
Stocks Spread
N/A
FCA Regulated
No
MT4 Integration
Yes
A suite of contracts for difference are available across popular markets with up to 1:500 leverage.
FTSE Spread
Floating from 0.2
GBPUSD Spread
Floating from 0.1
Oil Spread
Floating from 0.05
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
No
A regulated bank, Saxobank offer Equities and Forex trading on 40,000+ markets via the SaxoTrader Pro and SaxoTrader Go platforms
FTSE Spread
1.2 pts (Variable)
GBPUSD Spread
0.7 (var)
Oil Spread
0.03
Stocks Spread
0.10% (subject to min commission)
FCA Regulated
Yes
MT4 Integration
No
Fondex offers leveraged CFDs on a wide range of popular financial markets.
FTSE Spread
1.4
GBPUSD Spread
0.71
Oil Spread
6.71
Stocks Spread
Start from 0.01
FCA Regulated
No
MT4 Integration
No
You can take positions on a range of popular trading markets
FTSE Spread
Floating
GBPUSD Spread
Floating
Oil Spread
Floating
Stocks Spread
Floating
FCA Regulated
No
MT4 Integration
No
Trade CFDs across a wide range of assets with up to 1:500 leverage for professionals and 1:30 for retail clients
FTSE Spread
1.0 pts
GBPUSD Spread
0 pips (Via Razor)
Oil Spread
2.0 pips
Stocks Spread
From 0.0 pts for US shares
FCA Regulated
Yes
MT4 Integration
Yes
IB Boast a huge market share of global trading. With a minimum deposit of $10,000 however, they remain an option for larger traders only.
FTSE Spread
0.005% (£1 Min)
GBPUSD Spread
Commission (.20 pts x trade value)
Oil Spread
N/A
Stocks Spread
From 0.003 per share, variable
FCA Regulated
Yes
MT4 Integration
No
Trading 212 Offer a truly mobile trading experience. With tight spreads and a huge range of markets, they offer a dynamic and detailed trading environment. Recent customer care issues have severely damaged the reputation of the brand.
FTSE Spread
1.3 pt
GBPUSD Spread
2 pips
Oil Spread
5 pips
Stocks Spread
0.2% Var
FCA Regulated
Yes
MT4 Integration
No
Start trading on the financial markets with up to 1:500 leverage using competitive CFDs.
FTSE Spread
Not offered
GBPUSD Spread
From 0.1
Oil Spread
From 0.1
Stocks Spread
From 0.1
FCA Regulated
No
MT4 Integration
Yes
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
FTSE Spread
1 pt
GBPUSD Spread
2 pips
Oil Spread
5 pts
Stocks Spread
0.24% Var
FCA Regulated
Yes
MT4 Integration
No
Leveraged CFD trading is available on major financial markets.
FTSE Spread
From 0.0
GBPUSD Spread
From 0.0
Oil Spread
From 0.0
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Invest in traditional and emerging markets in line with your broker's supported assets.
FTSE Spread
Broker dependent
GBPUSD Spread
Broker dependent
Oil Spread
Broker dependent
Stocks Spread
Broker dependent
FCA Regulated
No
MT4 Integration
Yes
Alpari offer forex, CFD and binary options trading across a big range of markets with low spreads and a range of account types that deliver for every level of trader from beginner to professional.
FTSE Spread
13
GBPUSD Spread
0.7 var
Oil Spread
4 pts
Stocks Spread
Variable
FCA Regulated
No
MT4 Integration
Yes
Trade CFDs on forex, indices, & commodities
FTSE Spread
0.7
GBPUSD Spread
0.2
Oil Spread
0.3
Stocks Spread
N/A
FCA Regulated
No
MT4 Integration
Yes

CFD Day Trading Basics

  • Traders use CFDs to bet on price movements of an asset
  • CFDs are a derivative, meaning traders do not take physical ownership of the underlying asset, for example gold
  • CFDs are legal in the UK, regulated by the FCA, and are widely available on popular trading platforms
  • Day traders typically speculate on short-term price fluctuations that happen within a single trading day

A CFD is an agreement between an investor and an issuer, which allows the investor to bet on whether the price of an underlying asset will rise or fall. Since CFDs allow traders to make leveraged bets on price movements of assets such as stocks, indexes and currencies without owning them, they are ideal for day traders looking to earn money on short-term trades without undertaking long-term exposure.

CFDs are available to UK investors through brokerages and trading platforms, including some of the country’s most widely used and trusted sites. One of the quickest and easiest ways to begin day trading CFDs is through a popular trading platform such as Deriv. Different platforms will give traders access to different markets, including stocks and shares, indices, commodities and forex.

CFDs operate on a margin basis, and most platforms and brokers will need a deposit of around 10 percent of the contract value when the trade is opened. Since CFD issuers often require a minimum deposit to be held in accounts, traders may need to top up their deposit if they make a loss on a trade.

Getting Started

To get started with CFD day trading, an investor must first decide on which asset they wish to speculate on and which direction they think the price will move.

If they think the FTSE is going to rise, for example, the trader can open a long position with an online broker. If they open a contract on FTSE shares worth £10,000 when the trade is opened, and the price has risen to £11,000 by the time the trade is closed, the broker will have to pay the investor the £1,000 difference minus any fees. If the trade goes against the investor, their losses will be deducted from their deposit.

Leverage

As outlined above, many day traders use CFDs to make leveraged trades, meaning they can use borrowed funds to gain exposure to much larger trading positions than would normally be available to them. UK regulations limit the amount of leverage available to individual investors to 1:30 for currency trades and around 1:5 for stocks and shares. It’s worth pointing out that UK traders can access larger leverage rates if they day trade CFDs with an offshore, unregulated provider, though this brings with it additional risk.

CFD Day Trading Leverage Explained

Credit: IG

So, leverage can greatly increase gains made in a good trade, but it will also magnify losses to the same extent. Traders must be able to cover the entire contract value plus costs if a trade goes against them, so caution is advised when trading on high leverage. With astute use of leverage, however, CFDs can net large profits on relatively small price movements over a short time frame, making them an ideal option for day trading.

Note that if a trader keeps a leveraged trade going overnight or over a weekend, they may be required to pay an overnight or rollover fee, usually about 2-3 percent above the overnight fee charged by a bank.

Taxes

If they profit, traders are usually responsible for reporting their gains for tax purposes. In the UK, individual investors’ profit from CFDs is normally classed as capital gains and taxed accordingly. One advantage of CFDs is that, since the investor never actually purchases the underlying asset being traded, they are exempt from stamp duty. See our guide to trading taxes for more information.

CFD Day Trading Strategies

Like most investing, CFD day trading can be unpredictable. But by planning carefully and sticking to a few basic principles, traders can ensure they make the most of their good runs and limit their losses when trades turn against them. Some of the most important steps toward building a winning CFD day trading strategy are listed below.

  • Choose the right trading broker and online investing platform
  • Carefully research the market, for example currency pairs with GBP
  • Develop an effective CFD day trading strategy
  • Practice paper trades on a demo account
  • Implement systems to limit risk
  • Keep a trading journal

Choose the Right Broker

A wide range of brokers and platforms offer day trading on CFDs, and there may be a great difference in service and charges among any two. For example, typically brokers make money from the spread on forex and commodities trades, but some may also charge a commission. Another major difference is the range of assets available, as this limits the options available to traders who wish to deal with a particular stock or currency pair.

Besides these factors, it is important to choose a platform which is easy to use and provides all the necessary features. Investors who favour fast-paced trades will prefer a responsive system with minimal lag. Those who plan to trade CFDs alongside other investments may wish to find a flexible platform which allows them to keep their investments in one place and smoothly move funds around when the need arises.

Research the Market

Before a day trader thinks about putting their money at risk, they should have a good knowledge of the asset they are trading. Different assets will have different volatility levels and other characteristics, and these must be considered. Beginners are usually advised to stick to lower volatility assets, such as the GBP/USD currency pair.

Researching the asset’s price history is a great starting point, but investors should also closely follow market news and be sure they are aware of factors that could influence the price positively and negatively.

Choose a Strategy

Once investors are familiar with their CFD day trading platform and the asset they wish to trade, they can begin to research and practice different strategies. Some traders use technical analysis to predict an asset’s top and bottom price limits and trade on the swing between these two levels.

Others prefer to try to follow the momentum of price movements with a high volume of very short trades in a fast-paced strategy known as scalping.

Whichever strategy suits your style best, it is usually a good idea to get plenty of practice on a virtual account or with low-stakes trades before you move on to larger amounts and higher leverage.

Paper Trading

One of the most useful actions a trader can take is to spend time making paper trades before they start with real money. Many platforms allow users to open demo accounts and make paper trades on real assets without risking their cash. This gives new traders a chance to test their mettle before taking the plunge with a real day trade. It also allows more experienced traders to safely learn the ins and outs of a new platform so they can quickly and confidently hit the right buttons when the time comes to make a real CFD day trade.

Implement Risk Strategies

Leveraged CFD day trading can lead to large losses in a single unlucky trade, so it is vital for traders to plan carefully to limit risk. Most CFD platforms will automatically provide negative balance protection, which prevents a user from losing more than they hold in their online account. Investors should ensure they are aware of their platform’s policy before trading, but they should also implement their own measures with every trade.

Best CFD day trading brokers

Credit: eToro

Many platforms allow users to set automated orders which will end a trade once the price reaches a predetermined level. Day traders should take full advantage of stop-loss orders to cut their losses when the price is moving unfavourably. For example, if a trader opens a short position on stocks of Company A at £100 with a stop-loss order set at £105, their position will automatically close when the price reaches £105. This is especially useful for leveraged trades in which even a small price movement in the wrong direction can lead to substantial losses.

Similarly, traders can set orders which will automatically close some or all of their position once they reach a certain level of profit. This counters the natural human tendency to get greedy when a trade is panning out well, ensuring that the CFD day trader will earn profit on the trade even if the price movement suddenly turns against them.

Keep a Journal

You may wish to simply forget about the CFD trades that don’t pay off, but noting them down alongside your successful trades in a journal can prove helpful for aspiring day traders. Your trading journal will not only allow you to analyse your past trades to see what worked (or didn’t), it will also serve as a record of your net profit or loss throughout the year so you are not stumped when the time comes to pay taxes.

Bottom Line on CFD Day Trading

CFDs are one of the most convenient ways to begin day trading in the UK, since they allow investors to make leveraged trades on a range of assets without having to own them. Since CFDs are FCA-regulated and available on reputable platforms with built-in risk-management systems, they are also a relatively secure way to trade. However, traders should always be wary of the risks involved in leveraged trades, since these multiply losses as well as profits.

FAQ

Trading contracts for difference is both legal and popular in the UK, with CFDs available from many platforms on a range of assets from stocks to forex. However, cryptocurrency CFDs are not typically available in the UK, since the FCA has banned all crypto derivatives. Instead, British investors will need to register with an offshore provider to speculate on cryptos using CFDs.

What Is The Best Way To Day Trade CFDs?

Each trader will have their own requirements when day trading CFDs, so it is important to shop around to find the best broker or platform for your financial goals. Some may prefer the platform with the lowest fees, while others will look for one that has the quickest and most responsive interface for making fast-paced trades. See our list of the best CFD day trading brokers to get started.

Do CFD Day Traders Make Money?

In the end, CFDs like all derivatives are risky, and a bad trade coupled with high leverage can quickly wipe out a trader’s investment capital. By the same token, it is possible to make outsized returns when a CFD trade goes your way. Whether or not a trader makes money in the long run is largely determined by their ability to manage risk.

Is CFD Day Trading Good For Beginners?

There are several options for beginners who wish to start day trading with CFDs. The first and best is for them to invest their time in a virtual trading account, which will let them trade CFDs to their heart’s content without putting any real money at risk. Once they have a good grasp of trading on the platform and how to manage risks, they can move on to trading with real money.

Is CFD Day Trading Risky?

All day trades carry risks, but the leverage usually employed in CFD trades has the potential to multiply those risks many times over. The key to successful trading is to manage risks by carefully planning your trade and setting realistic stop-loss orders. Traders should also ensure they trade on a platform that has negative balance protection in case a trade wipes them out, and take profits regularly when the market moves in their favour.