Dear Guvvy,
Couldn’t get your query completely but from what I understood my reply is as follows: -
When you sell / go short on EUR/USD pair - that means you are selling Euro in advance and will buy it back at lower price e.g.
Sold @ 1.2500 and after it down trended bought back @ 1.2400. This means you sold Euros to somebody at higher rate then the rate you bought at. The difference of 100 (2500 - 2400) is your profit. In Long applies vice-a-versa.
In a nutshell, if you’re “long”, you’re long the euro against the dollar, and you want euro value up. If your “short”, you’re long the dollar against the euro, and you want dollar value up.
Yes Indeed. I am newbie to Forex Trading. Learning and also currently practicing demo account. You can always feel free to contact me - my skype ID : joshifx
Technically, your transaction never happens. Spot forex is a bid now, to buy the currency tomorrow. Tomorrow, you will roll over your option until the next day, which is why there are rollover charges for trades held longer than a day.
So, your trade never leaves the pound, but since the value of the EUR/USD has changed since your trade was opened, you pocket the difference, or give the loss to the broker. You never will own euros or dollars.
Depends on when your brokers changes days. Say your broker uses GMT as time. If you open a trade at 0:01 AM, and close it at 23:59PM, there’s no swap. But if you open it at 23:59PM, and close it at 0:01AM, those two minutes will cost you a rollover rate.
aren’t rollovers always done at 5pm NYC time with all brokers?? i thought that was the industry standard (and also means that if the broker counts in GMT hours, the GMT time will shift to always line up with 5pm NYC time)
I don’t think it’s quite that standardized, but it’s that way for most American brokers. That’s why I used a generic GMT analogy to explain how the rolls work You can have a trade open for 23 hours, and 59 minutes, and not pay it. But have one open for 2 minutes at just the wrong time, and you’ve got an extra cost.