Swap is an interest fee that is either paid or charged to you at the end of each trading day. When trading on margin, you receive interest on your long positions, while paying interest on short positions. The net interest difference is known as the carry and traders seeking to profit from this are known as carry traders.
Positive carry results when you receive more in interest than you are required to pay, and is added directly to your account. If the carry is negative, it is subtracted from your account. If you open and close a trade within the same day, the trade has no interest implications.
I just remove my stops each day at 4:50pm eastern time. The market closes briefly from 4:55pm-5:05pm. The swap last til 6:00pm. All eastern times. Then I add them back in.
If your holding trades for days or weeks the swap usually doesnât effect you. But us intraday traders and the like, it can stop you out.
I actually just found this post from googling this question⌠this HAS TO be an onda thing. Everyday from 5pm-530pm (est NY time) the spread increases. Typical spread for EU is 1.5⌠idk why but everyday at 5pm it goes to 10 pips⌠I would like an explanation as it has now for the third time caught me off guard and landed me 10 pips away from my position. When scalping a 15 pip trade, 10 pips could blow your acct.
Check this out. I experienced this too at the end of the week and then went searching for answers. Here you go! Pop in your pair and you can see the changes over time. At least theyâre being transparent.
Okay guys, so Iâm not seeing any super duper answers here. Iâve been trading since 2013 and have a bit of experience with this. Let me explain:
The Asian session starts a brand new day for forex trading, but it does not start in Tokyo like a lot of people think. Itâs actually the Australian banks that kick it off for the first hour. Sometimes, the trading doesnât start right away since the liquidity providers are not up and running yet. For that reason, thereâs just not enough money, so the market makers (brokers) have to step in and provide enough liquidity for the trades (which gets expensive, thus the high spreads and commissions).
The Asian session doesnât start in earnest until the Tokyo banks open, and then, it may take another hour to get going. Itâs not like the London session, where there is massive amounts of liquidity available at the open.
Therefore the Asian session doesnât really start in earnest until a few hours after the NY session closes. Itâs a bit tricky, but look for two things:
The spreads go back to ânormalâ
A breakout or strong reversal will typically kick off the Asian session
I hope this clarifies things a little. I know from experience how frustrating the Asian session can be.
Oh, one more tip for daily swing traders:
If youâre waiting for the daily candle close to enter at the market for a swing trade, itâs best to do it at least 15 minutes prior the NY close to avoid the increase in spreads.
Itâs whatâs known as âthe swapâ, different brokers do things differently but basically for around half an hour every night the market closes, and the spreads are recalibrated and a swap fee is charged for overnight holdings. Every broker does this.