An Exness Guide to Swap Fee in Forex Trading

@Riri:

The carry trade strategy can be risky and complex, and may not be suitable for beginners. The strategy involves borrowing money in a currency with low interest rates and investing it in a currency with higher interest rates, with the goal of profiting from the interest rate differential. However, the trade also involves foreign exchange risk, which can be volatile and unpredictable.

If you are a beginner in trading, it is recommended that you start with simpler strategies that involve less risk and require less expertise. It is important to gain a solid understanding of the basic principles of trading and risk management before attempting more advanced strategies like the carry trade.

Additionally, it is important to have a sound trading plan, sufficient capital, and a good understanding of the macroeconomic factors that can impact the currencies you are trading. It is always wise to do thorough research, practice with a demo account, and seek the guidance of an experienced mentor or financial advisor before attempting any complex trading strategies.

Farha: The most popular carry trades involve buying currency pairs like the Australian dollar/Japanese yen and New Zealand dollar/Japanese yen because the interest rate spreads of these currency pairs are very high. The first step in putting together a carry trade is to find out which currency offers a high yield and which one offers a low yield.

Given that New Zealand and Australia have the highest yields while Japan has the lowest, it's no surprise that AUD/JPY is the best to do the carry trade. Currencies are traded in pairs, so all an investor needs to do to execute a carry trade is buy NZD/JPY or AUD/JPY through a forex trading platform with a forex broker.

Jonathan: Swap rates can only be viewed on the broker's website. All information about swap rates can be found in the trading instrument details. Find swap information or there are words "long" and "short". swap rate numbers do not have a percent sign andc can show either positive and negative values. All brokers have swap information, swaps can change daily and are not the same as other brokers

MT5 or MT4, on the other hand, do not provide information about swaps, whether they are charged or not. It's like suddenly reducing profits or adding pending losses or vice versa.

Reese: This will have an impact if your transaction remains open until the server time change date. if you mean that short traders are style day traders, scalpers and day traders, then that won't affect the trade itself unless you trade close to the change of day.

However, if you mean short-term traders who trade for a few days, the swap fee rate will be calculated based on the time that has passed since you opened your position. And if your entry trade is opened on Wednesday, you will receive three times the swap rate fee. So be careful and keep an eye on the swap rates, and prepare extra deposits to accommodate potential floating losses

Reuben: Yes, at the broker, all instrument trades will receive a swap fee. It could be Forex, trading metals, commodities, indices, cryptocurrencies, stocks or even futures. There is no way to avoid swap fees unless you open a swap free account or make short term trades for less than a day, scalping and day trading. But don't trade near the closing of the day because you can get swap fees if your trading position still opened.

To check detailed information about products that can receive exchange fees, you can visit the broker's website and search for detailed information on assets that can receive exchange fees.

Dude, swing trading is harder than you think if you're funds are not enough to do the trade. In swing trading, the target number of pips a trader wants is a larger target than in day trading. If day trading requires 100 pips to 200 pips, swing trading needs more to get more profit. As usual, swing traders will look for trading accounts with fixed spreads and a small commission to minimize fees, especially swap rate fees.

Since his target is 200+ pips, the profits that he can get maybe more than $200 on standard account e.g., if they hold for 3 days, he can pay out only $24 if conditions are similar to the article's example.

Note: if you want to be a swing trader, you need more funds to cover your floating losses and avoid margin call. The more money, the better.

Martin: If you said so about the swing trading`s condition and the funds that needed are high. What about the strategy itself? do you have any suggestions for a swing trading? And the technical indicator that i can use for swing trading as I think forex trading also needs technical analysis and fundamental analysis. If you have any examples, I would appreciate it! Thank you!

Carl: Of course, you also need trading indicators and fundamental analysis! I have an indicator you can use! Below you can read some articles on swing trading strategies and indicators :

• Moving Average for Swing trading
• Best EMA for swing trading
• Bolinger Bands For swing trading

These indicators are most common used in trading. It is very to use and I think it is suuitable not only for swing trading but also other trading style but of course with different setting. And also don't forget about the fundamental analysis too! With the combination, you can predict the market more accurate!

@Honoka:

In addition to swap fees, traders on Exness should also be aware of other fees and charges that may impact the total cost of their trades. Some of these fees include commission charges, deposit and withdrawal fees, and inactivity fees (fortunately, Exness doesn't charge inactivity fees, like Oanda)

Exness offers commission-free trading for most account types, but some accounts may charge a commission per lot traded. Traders should check the specific terms of their account type to understand any commission charges that may apply.

Deposit and withdrawal fees vary depending on the payment method used, and traders should check the Exness website for the latest fee schedule. Inactivity fees may also apply for accounts that have been inactive for a certain period of time.

To calculate the total cost of their trades, traders can use the Exness calculator tool, which takes into account the spread, swap fee, and any other applicable fees. This tool can be accessed through the Exness trading platform or on the company's website.

It's important for traders to factor in all fees and charges when calculating the total cost of their trades, as these costs can impact their profitability and overall trading performance. By understanding the various fees and charges associated with trading on Exness, traders can make more informed trading decisions and manage their risk more effectively.

To get an Islamic or swap-free account with Exness, you just need to reach out to their customer support team and ask for it. They'll walk you through the process of converting your account.

As for fees, Exness doesn't charge extra fees or commissions for their swap-free accounts. However, the spreads (the difference between buying and selling prices) might be a little higher on swap-free accounts. This is because the broker has to cover their costs of financing positions that are held open overnight without charging interest.

Just keep in mind that the difference in spreads can vary depending on the currency pair you're trading and other factors, so it's always a good idea to check the current spreads and fees for your specific account type and currency pair before making any trades.

I can help clarify your question about swap fees. If the long swap rate is -5 and the short swap rate is 2, this means that if you hold a long position overnight, you will be charged -5 points and if you hold a short position, you will receive 2 points. The swap fees only apply if you hold an active position overnight. If you trade with 1 lot, you will paid $5 or get $2. But if you trade with 0.01 lot, the swap that you will paid is at $0.05 and you will get $0.02 if you open the short position.

Regarding your specific example of trading 0.01 lot with a swap rate of -0.86852 and opening on Tuesday and closing on Thursday, to calculate the swap fee, just follow the article instructions.

Assuming a lot size of 0.01 and a swap rate of -0.86852, you can use the following formula to calculate the swap fee for a currency pair:

Swap Fee = Lot Size × contract size x pip size × swap rate x Number of Nights

In your example, you held the position overnight from Tuesday to Thursday, which is a total of 5 nights. Plugging in the values, we get:

Swap Fee =1000 x 0.0001 x -0.86852 x 5 = -$0.43

Now I understand why the lot size in the formula mentioned in the article is 100,000. It's because of the trading volume size. The swap fee charged is based on the pip value of the currency pair. Therefore, the larger the trading volume, the higher the swap fees will be. However, if we trade with a smaller volume like 0.01 lot, the swap fee charged will also be lower since it's based on the trading volume entered. In other words, the calculation of the pip value for the swap rate is similar to how we calculate the spread amount. Thank you for providing an example and explaining it to me.

@Jerry:  Yes, it is true that Exness only offers a swap-free account option for traders who are domiciled in Islamic countries. This is because the swap-free account follows the Islamic principles of finance, which prohibits the charging or earning of interest. However, for Muslim traders who are not domiciled in Islamic countries, there are still other options available.

The only option that can be used is to use regular trading accounts and simply avoid trades that involve interest, known as "Riba" in Islamic finance. Some brokers also offer educational resources to help traders who wish to avoid interest-based trading. The trading such as short-term trading may help them to avoid Riba because the trading be done before changing day.

Hey there! When it comes to the  Islamic account offered by Exness, you won't have to worry about those pesky swap fees. Instead, they've got this thing called administration fees in place. These fees are there to keep things in line with the whole interest-free concept in Islamic trading.

So, here's the deal. The administration fees in the  Islamic account are based on a fixed percentage that's applied to any open positions you hold overnight. The exact fees might vary depending on what you're trading and what the market conditions are like at the time.

But hey, remember that there are other regular trading costs to keep in mind too. Things like spreads, commissions, and any possible deposit or withdrawal fees. These expenses are pretty much similar to what you'd find in any other trading account.

This is because the swap rate calculates Wednesday's triple times. As stated in the first paragraph of the article, brokers must request swaps to maintain overnight positions.

In fact, the condition for opening trading on the forex spot market is two days before the actual settlement date. Deals closed on Thursday have a value of Monday. Transactions made on Friday will be applied on Tuesday. On Wednesdays, the rollover amounts are tripled to balance out the upcoming weekend (due to trading breaks on weekends, rollovers are not calculated during this period).

and in the swap-free account, Wednesday will be the day that they charge 3 times fee too

Swap fees for each currency pair at each broker may be different. However, you can find out how much swap there is in each currency pair by looking at the detailed contract specifications. If you see a positive swap rate for a currency pair, then you will gain additional profit from the positive swap that has been set. However, if you see a negative swap rate, it means that you have to pay the negative swap that has been set.

According to me, your calculations are correct. and Yes it is if deposited after broker closing hours. In addition, most brokers implement 3-day swaps on Wednesdays. This means that interest on Wednesday-Thursday is calculated 3 times because Saturday and Sunday there is no interest anymore, so the total in a week is 7 times interest.

First, the easy part - to do a carry trade, you borrow in a country that offers low-interest rates (for the past few decades Japan has been a favourite) and invest in a country that has high interest rates (like Australia currently). You collect a higher interest rate and pay a lower interest rate, so you earn the difference. However, at that time, currency exchange rates may change and you may lose money.

If we think about this in a different way, if things were running efficiently, the interest rate differential would actually be a market price against the future exchange rate. So, if the interest rate in Australia is 4% and in Japan it is 0.1%, then the value of the Australian dollar vs. the Yen will fall by 3.9% in the next year. In fact, there is a market called the bank forward market that determines the price of future exchange rates, and this is indeed the price you are seeing. If the forward market price were anything else, then there would be strict arbitrage, which a carry trade is not. A carry trade is probably best thought of as a trade that bets against this 3.9% drop actually happening. Historically, this has worked quite well. I offer several theories about why.

Read : The Best Brokers for Carry Trade

First, the cash savings market is dominated by people and companies who hold cash in their local currency, not because that currency pays them the most interest, but because it is more convenient because their liabilities tend to also be in their local currency. Merchant carry is just a small drop in the ocean of bank deposits. So, if no one is chasing a higher exchange rate, this could be out of sync with the exchange rate they predicted.

Second, central banks change interest rates artificially, and this is largely based on domestic economic pressures. These interest rates are not determined by the borrowers and lenders who need the currency now or in the future - those players are just playing along, and making some money from pricing errors is not difficult. Central banks move interest rates in ways that suit their domestic objectives but allow currency forward pricing to be imprecise, and currency markets are large enough that such pricing persists over long periods of time.
The problem with the loss might be due to the uncertainty of the exchange rate, in my opinion, it's not too much of a problem. The benefits are also more.

I just want to add an explanation regarding the risks that traders who use the Carry Trade method will face because this cannot be considered easy in my opinion. The problem with carrying trades is exchange rate uncertainty. Rapidly changing forex exchange rates make it important for a trader to consider more than just interest rates in carry trades. The directional trend of the pair should also be considered as a move in the wrong direction can easily wipe out profits made from interest rate differentials in a carry trade. That means big losses can occur even when traders make money from interest rate differences.

In my opinion, this is quite a big risk because we cannot prevent currency fluctuations. The high level of leverage used in carry trades means that even small exchange rate movements can result in large losses if the trader fails to hedge his position appropriately.

Negative market sentiment among traders can have a quick and severe impact on carry pairs. Without adequate risk management, a trader's account can be wiped out suddenly and brutally. The best time to enter a carry trade is when fundamentals and market sentiment support it. For this reason, carry trading is only a good option for traders with a high-risk appetite.

when it comes to trading cryptocurrencies with brokers like Exness, it's important to keep in mind that these guys are primarily forex brokers. That means that when you're trading crypto through CFDs, there could be swap fees involved.

Now, as for cryptocurrency CFDs specifically, swap fees can vary depending on the broker and the specific asset you're trading. Some brokers might offer better swaps for long positions, while others might be more favourable for short positions.

Oh, and speaking of interest rates, the swap rates for cryptocurrency CFDs can be influenced by things like supply and demand, market sentiment, and interest rate differentials.

Now, when it comes to charts, you might notice that the graphics and formats for cryptocurrency CFD charts and cryptocurrency exchange charts can be a bit different. While they both show things like price and volume, they might have different designs and layouts depending on which platform you're using, but the source is the same after all.

You are correct that Exness is primarily a forex broker, but they also offer trading in a variety of other assets, including cryptocurrencies, through CFDs (Contracts for Difference). When it comes to trading cryptocurrencies through CFDs, it's important to note that some brokers do charge swap fees, which are essentially the cost of holding a position overnight.

In the case of Exness, it's best to check their individual websites or speak with a customer service representative to get the most up-to-date information on their swap fees for cryptocurrency CFDs.

Regarding interest rates for crypto swaps, it's possible for different cryptocurrencies to have their own interest rates, just like with traditional currencies. This can be influenced by a variety of factors, such as supply and demand, market sentiment, and overall market conditions.

As for charts, the graphics and chart formats for cryptocurrency CFDs and cryptocurrency exchanges can vary depending on the specific platform being used. However, both types of charts generally display similar information, such as price data and technical indicators, to help traders make informed trading decisions.

Interested in the Exness Swap Free Account? Here's the lowdown: tailored for traders adhering to religious practices prohibiting interest transactions, it waives swap fees on overnight positions. While it's fee-free, note its wider spread, affecting overall trading costs. Also, not all instruments are available, so check availability. Depending on your style, it may suit long-term investors or those relying on overnight strategies, but not high-frequency traders.

Let me answer your question! Carry trade is a trading strategy where an investor takes advantage of the interest rate differential between two currencies. In the context of swap fees, carry trade involves borrowing money in a currency with a lower interest rate and using it to invest in a currency with a higher interest rate. Traders aim to profit from the interest rate differential and the associated swap fees.

In simpler terms, carry trade is not just about gaining benefits from swap fees; it's a strategy that capitalizes on the interest rate variations between currencies.

As for the risks of carry trade, they primarily revolve around currency exchange rate fluctuations. If the exchange rates move unfavorably, it can offset the gains from the interest rate differentials, leading to potential losses. Additionally, economic and geopolitical factors can influence currency values, introducing an element of risk to carry trade strategies. Traders engaging in carry trade should carefully monitor market conditions and be aware of potential risks associated with this approach. (read more about carry trade : Carry Trade In Forex Trading)

Engaging in carry trading on Exness, where there are no restrictions on such practices, can offer opportunities for traders to capitalize on swap differences in their trading instruments. Carry trading involves seeking profits from variations in swap rates. The effectiveness of carry trading compared to normal trading depends on various factors, including market conditions, the specific instruments traded, and the trader's risk tolerance.

Carry trading can be effective in certain market environments, especially when there are clear interest rate differentials between currency pairs. However, it comes with its own set of risks, including market volatility and unforeseen events impacting currency values.

For beginners, it's important to approach carry trading with caution. While it can be a profitable strategy, it requires a good understanding of market dynamics and risk management. Beginners should thoroughly educate themselves on carry trading principles, monitor market conditions closely, and start with small positions to gain experience without exposing themselves to excessive risk.

Regarding your questions:

• Free Swap Account: The suitability of carry trading in a Free Swap Account would depend on the specific policies of Exness. You may want to refer to their terms and conditions or reach out to their customer support for detailed information on the use of carry trade in such accounts.

• Consideration for Muslim Traders: Whether carry trading is considered haram for Muslim traders depends on individual interpretations of Islamic finance principles. It is advisable for Muslim traders to consult with a qualified Islamic scholar or financial advisor who can provide guidance based on their personal circumstances and beliefs. But in general, any trade or activities that involved with "rate" considered haram. (read : Introduction to Islamic Account in Forex Brokers)

• Prohibition by Brokers: While Exness allows carry trading, some brokers may have restrictions or prohibitions based on their own policies. The reasons behind such restrictions can vary and may include risk management considerations, compliance with regulatory requirements, or the broker's business model. It's recommended to review the terms and conditions of specific brokers or contact their customer support for detailed information on any restrictions related to carry trading.

Hope it can help!

To maintain the swap-free status on your Exness account, it's crucial to adhere to the broker's terms and conditions meticulously. Exness reserves the right to cancel the swap-free status if any abuse or misuse is detected. Activities that might lead to the cancellation include engaging in arbitrage, which exploits price differences between different brokers or markets, or implementing hedging strategies specifically designed to take advantage of the swap-free status. Any violation of the broker's policies, intentional or not, could trigger the removal of swap-free benefits. It's advisable to thoroughly understand and comply with Exness' rules governing swap-free accounts to ensure fair and transparent trading practices. If there are any uncertainties about specific activities, seeking clarification from Exness' customer support is a prudent course of action to avoid inadvertent rule violations.

I'd be glad to provide further clarification on the circumstances that could lead to the cancellation of a swap-free account status. Essentially, Exness stipulates that if a client is discovered to be exploiting or misusing the swap-free status associated with their account, the company reserves the right to revoke this privilege. Such exploitation or misuse could encompass actions such as engaging in excessive trading solely to avoid swap charges, or deliberately holding positions for extended periods under the guise of adhering to Islamic finance principles while actually seeking to circumvent swap fees. Additionally, if a client is found to be conducting activities inconsistent with the intended purpose of a swap-free account, such as using it for speculative purposes rather than genuine adherence to religious beliefs, Exness may opt to terminate the swap-free status on the account. In such cases, the company would then commence applying swap charges for any existing open orders, as well as for future orders. Therefore, it's imperative for clients to utilize swap-free accounts in a manner consistent with the principles of Islamic finance and in good faith, avoiding any actions that could be perceived as exploiting or abusing the privilege of having a swap-free account. Hope you can understand about that!

The reason behind tripling the swap rates on certain days, like Wednesdays or Fridays for Energies, by brokers like Exness is to account for the upcoming weekend when swap fees aren't typically applied. This adjustment aims to ensure fairness and balance in the charging of swap fees over extended periods, including weekends, when market activity may differ.

While it may seem like a significant increase in fees, especially for traders with open positions during those times, it's important to consider the rationale behind it. Ultimately, it's part of the broker's policy to manage and compensate for the lack of swap fees over weekends, ensuring consistency and fairness in their trading conditions.