I’m currently using IG markets as my brokerage and I’m about to start another account with BlueBerry Markets (because both Andrew Mitchem from TheForexTradingCoach and Justin Benett from PriceActionDaily uses them)
Also considering Pepperstone as well, because my mentor Felix (SmartForexLearning) uses that.
as you can tell, i’m new to currency trading so i’m seeking knowledge from different teachers.
My question - do you only earn interests (or lose money on negative interest differentials) when your trades go overnight? and not when the bulk of your $$ are sitting in cash?
I am practiicing strick money management where i only risk at most 2% of of my capital in ever trade. With just 5-8 trades a day, more than half closed within the day, i find that only a third of them generate interests in over-night trade positions (and some loses money on negative interest differentials)
Essentially, this means that my margin is really small, and the bulk of my capital is not utilized, they are not earning interests.
i read in forex education books that i could use my forex trading account like its a saving account earning interest. but i find that’s not the case. Monies that are not entered into trades are simply not earning interests.
what might i be doing wrong here? am i with the wrong brokerage?
If you don’t mind, may I know your learning experience?
it’s been great so far. We are a small group (30+ students) with Felix being very hands-on and attentive to our questions
but let’s not digress, you are welcomed to PM me
back to my question - what might i be doing wrong here? am i with the wrong brokerage?
I read in forex books that my forex account should be earning interests even if not all my monies are entered into trade. but that doesn’t seem to be working for me…
No idea about this specific company!
A swap fee is charged when you keep a position open overnight. A forex swap is the interest rate differential between the two currencies of the pair you are trading, and it is calculated according to whether your position is long or short. This being said, in the ideal scenario for each pair you should be able have a positive swap rate (e.g. gain on interest) either for long or for short position. Unfortunately this is not the case as you have noticed by yourself because either the liquidity providers or the brokers (or both) mark up the swap rates so that they can profit from the differences between interest rates. Of course there are also pairs from which you can gain positive swap (by holding short position on EURTRY for example). In most cases this is related with having a running negative PnL from the current position. Best would be if you could enter and profit from both: swap and price movement. You need to be patient to do that and wait for the best moment to enter in a trade.