Swap
Transactions on the Forex market are made on Spot terms. It means that
all the deals are made with the actual delivery of the currency the next
workday after their execution. However, there is no need for the real
delivery of the currency in case of speculative trading (speculative
trading is actually something that you are about to start). If you
execute order during one workday, the delivery is canceled. It does not
cause any problems. But what if you have to leave your order open for
more than one day?
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For Wednesday-Thursday rollover, swap is deducted/added in a triple size (for Wednesday, Saturday, Sunday).
The operation of the rollover of the position which is called
Swap
has been created for this purpose. The basis of this operation is that
you need to "close" the order and reopen it at the close price. At the
same time, funds that are equal to the swap size are deducted from or
added to your account. The swap size depends on the interest rates of
the Central Banks and the range of other factors. Because the interest
rate is set by the Central Bank of each country, this leads to a
situation wherein the difference between the interest rates of various
currencies may be quite considerable. The calculation of the swap rate
is carried out in the view of this difference.
Swap is calculated automatically in the end of every trading day. For
Wednesday to Thursday rollover, swap is deducted/added in a triple size
(for Wednesday, Saturday and Sunday). In the MetaTrader 4 trading
platform you can see all the current swap rates of every currency pair
(to do this, right click and choose "Symbols" in the "Market Watch".
Choose the currency pair you need in the appeared window and click the
"Properties" button. Swap rates of long and short positions are
displayed in pips).