馃攳
Lesson 6.1: What is swap in forex trading? - YouTube
Channel: Financial Wars
[0]
- hey everybody welcome we're adding a
[2]
little lesson in between other lessons
[4]
we're recording this later on so maybe I
[6]
was wearing a tie and the last lesson
[8]
and maybe I'm going to be wearing a tie
[10]
in the next lesson but I remembered that
[13]
I forgot to tell you about swap interest
[17]
or rollover these terms are synonymous
[19]
with one another and they are used
[20]
interchangeably in the world of currency
[23]
trading or FX trading swap is the
[26]
interest paid at the time of rollover
[28]
every day the currency market sort of
[31]
rolls over at about 5 p.m. I was being
[37]
really careful this time night to draw
[39]
slowly yeah maybe it was because I
[44]
zoomed in and if I gotta wait till that
[46]
thing disappears at about 5:00 p.m.
[48]
eastern US time your FX dealer will roll
[54]
your trades over you will not probably
[55]
see anything different about them but
[58]
you've carried a trade from one day into
[62]
the next sometimes this is also referred
[65]
to as carry as in the carry trade or
[72]
you've carried a trade from one day into
[74]
the next alright so what what is this
[78]
inside of your platform when you take a
[81]
trade and will view the terminal window
[86]
inside of Metatrader here one of the
[89]
items that you're going to see in your
[91]
terminal window on the right side inside
[94]
the terminal window part of your open
[96]
trade is swap swap is the interest that
[99]
you either earn or the interest that you
[102]
pay for holding on to a trade overnight
[106]
generally you will not earn or pay
[108]
anything if you do not hold that trade
[110]
through 5:00 p.m. eastern US time or
[113]
whatever time your broker uses but some
[116]
dealers will charge or pay interest on a
[119]
minute-by-minute basis check with your
[121]
Forex dealer to find more information
[122]
about that why do they do that well in
[127]
the in the big world of trading every
[131]
Central Bank around the world
[133]
has an interest rate and you could see
[136]
this on the nightly news especially the
[138]
business news central banks set base
[141]
interest rates so a central bank in
[145]
Australia might have a 6% interest rate
[149]
a central bank in Japan the Bank of
[154]
Japan might have a 0.25 interest rate
[160]
Nate no this is obvious but which number
[163]
is higher the six is higher so this is
[168]
Australia this is Japan so if you're
[175]
playing along at home let me ask a
[177]
question Alaska to Nate and you can take
[178]
a moment to answer if you buy the
[180]
Australian dollar / Japanese yen and you
[185]
hold it overnight will you earn interest
[188]
or pay it you're going to earn it
[192]
because the Australian interest rate is
[194]
higher now the reason this is a this
[197]
exists is a mystery to most everyone and
[201]
it's been forgotten but in the old days
[203]
you are holding on to something
[205]
overnight in your bank account and you'd
[209]
get paid interest on your holdings just
[212]
like you would and on an annualized
[213]
basis you'd get paid a little bit of
[215]
interest to holding on to a high
[217]
interest pair against a low interest
[219]
pair if you're holding a high interest
[223]
pair against a high interest pair you
[225]
might even get charged a little bit of
[227]
interest if you sell the Australian
[231]
dollar Japanese yen you're short the
[235]
Australian dollar and you're buying
[236]
Japanese yen in that case you're going
[239]
to pay interest if you hold that trade
[241]
overnight for simple calculations on
[244]
swaps you can go to FX swap well it's
[249]
not doing anything you can type into
[251]
Google I'll just write it down here for
[254]
you
[254]
you can type in FX
[262]
swap and I have two types I have to
[274]
write slowly so it doesn't move the
[275]
monitor FX swap calculator and a series
[282]
of websites will come up and you can say
[283]
oh I'm buying the u.s. dollar Japanese
[285]
yen or I'm selling the British Pound US
[288]
dollar and you can type in your trade
[290]
size Siri thought I was talking to you
[296]
here that Siri was just answering
[298]
nothing that I asked her that's pretty
[301]
funny if you google that you can find
[305]
calculators that will show you the
[307]
overnight rate that you get paid or
[309]
charged generally this is a small amount
[312]
of money and does not mean a lot or
[314]
factor in to your trading unless you're
[316]
holding on to something for a very very
[318]
long time I want to thank Forest Park FX
[321]
our sponsor if you're interested in FX
[323]
trading contact Forest Park FX to open
[325]
an account and get paid cashback rebates
[327]
on every trade you place go to Forest
[329]
Park FX com forex trading carries
[331]
significant risk of loss terms and
[333]
conditions will apply we'll see you in
[335]
the next one
Most Recent Videos:
You can go back to the homepage right here: Homepage