Suppose you are trading a currency pair on a 4 hour time frame.
Now suppose the trade is good and you go [U]long [/U]and it will ultimately be a nice success after, say, 2 days. You have also set your stop loss correctly.
However, shortly after the trade, the price action temporarily goes into negative territory for a while, ie you are temporarily in loss teritory. (The price will change later putting you in profit).
Now [U]rollover time [/U]comes and just at this time you are still in [U]loss [/U]teritory.
[B]Question [/B]
1) Do you not incur a debt from the rollover interest?
2) In this case above, does it really make a difference which country has the higher interest rate - after all, you are at a loss position - so a debt is incurred either way?
3) Does not such a debt kill any profit you hope to make anyway - the debt and profit could cancel each other out.
4) Does this not mean that you had better be in profit teritory in the first 12 hours or your hopes of making a profit are dead!!:eek:
Answers from people who know what they are talking about would be really appreciated.
Kind regards, Tymen Wortel, Perth, Western Australia.