Why do swap fees add to your margin?

Beginner Questions
1

Hi, when I closed a trade the swap fee was added to my margin? But the level reduced… can anyone help explain? How does the margin reduce?

2

Hi, could you explain in more detail please? Swap fee can be added or subtracted from your balance if you keep the trade open overnight.

3

Thanks for helping, and of course!

So I have lots of trades that are open and evenly hedged. This was created by an EA and I’m trying to get out of it manually…

So I closed half of a buy trade and the Margin went from £400 to ~700. I then closed the remaining lots of the buy trade and it went from 700 to 1192. Both trades were losses and it has increased the margin by the same amount as the swap fee.

I still have open sell trades on the same pair and others open on different pairs. It’s a total nightmare!

Any help is much appreciated. I’m just worried about margin call if I keep closing trades.

4

I think I know why now. I think it’s due to the opposite hedge trade I have. So hypothetically, if I closed the opposite trade the margin would reduce.

5

I would say go on to a deep research by yourself because then you may understand why you are landing into this situation. It is not making sense to me why this particular situation is happening.

6

Research is good and you can also contact your broker because every broker has some different margin policies.

7

Yup that is true! When I was using Fxview as a broker there requirement is that if the equity in the account falls below 70 percent then you get a call and if it goes below 50 percent it will automatically close positions. When I was using Oanda as my broker then for every market the requirements were different. So yes it depends on brokers what their policies are related to the margin.

8

To calculate the swap rates in forex trading, you will have to know about the interest rate differential between the currencies being traded. It is the rate at which you are willing to exchange rates in one currency for interest in the other currency.

9

It’s true that a single broker cannot fulfil all your requirements. You will have to use different brokers at different times to make profits. Some brokers are good with one thing and the others are good at other things. Consider your requirements and trade with multiple brokers.