Understanding SWAP in Forex Trading Terms
SWAP Is – For forex traders or those of you who are learning to trade, you may have heard the term SWAP or SWAP interest before. Actually, SWAP itself is not the most important determining factor of one's trading success as is analysis. But if a trader understands the meaning of SWAP and can take advantage of it, the rollover interest can bring long-term benefits. So what exactly is SWAP? SWAP is the value of the difference in the reference interest of each currency traded on the forex market. This interest will be earned by traders in transactions that are open until past midnight (stay trading positions). But please note that these SWAP payments are not always positive but can also be a burden in the trading that you do. Understanding and How to Calculate SWAP in Forex The main concept of SWAP is to calculate the difference from the interest you pay for the foreign currency sold and the interest you get from the currency you buy. Because forex trading is always done using paired ...