I have come to understand that the pattern day trading rule applies to forex just as it does with equities in a margin account but does anyone know if your day trades are settled immediately for withdrawal in a forex account or if it also takes 2 days
As soon as a trade is closed, it is “settled” — that is, P/L for that trade is immediately credited (or debited) to account equity. If the trade resulted in profit, that profit can be immediately withdrawn.
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Ok what brokerage are you using? from what I’ve been reading online t2 also applies to fx
Several of them. But, that’s beside the point. We are talking about how the retail spot-forex industry works, not about the policies or procedures of any particular broker.
I think you are confusing two things.
(1) The spot forex market is a cash-settled, futures-lookalike market, in which the transactions entered into (between customers and brokers) are nominally stated for settlement in two days.
This is the “futures-lookalike” aspect of spot forex.
However, one day after entry into a spot forex transaction, the “settlement” date is rolled forward by one day. Therefore the settlement date never arrives, and — unlike a true futures contract — a spot forex contract can (theoretically) run forever, without expiration.
(2) Settling ownership is the entire reason for the T+2 settlement procedure in markets such as equities, where ownership of shares of stock is transferred from seller to buyer. That settlement, which is typically done by a clearing house, can take time. Hence, T+2, meaning “transaction date plus 2 days”.
In spot forex contracts, the speculator who is betting on the price movement of a currency pair does not own either of the currencies in the pair, and will never take ownership of either currency.
When the forex position is closed, the bet is immediately settled.
Can you please explain this, why is settlement date rolled forward by one day and why are fx transactions nominally stated for settlement in two days?