Transcript Swap-Presentation

Which platform do I choose?
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For starters—Forex.com
Why?
Free esignal--$99 value/mos
Forexearlywarning.com—sign up for MM FEW
report--$20/mos
• Thru forexearlywarning.com open an account
with forex.com
• Minimum of $1000—mini account
• Call 4xmadeeasy and suspend your esignal data
feed—(make sure you are getting the esignal
from forex.com first)
• Make 10 mini round trip trades (10 in, 10 out) in
forex.com account each calander month—if you
don’t you will lose your esignal
• Forex.com will credit your account each month
with $20 to pay for the FEW reports
• Worse case scenerio—trade 10 mini lots of
eur/usd @ 3 pip spread—get in then out
immediately during quiet time—it will cost you
$30 --still a net savings of $70 on the esignal
and $20 for the FEW.
Then what?
• FXCM –no dealing desk option, very easy
to learn and use, hedge on same account,
pay swaps on mini accounts
• Interbankfx—no dealing desk,
micro/mini/standard accounts, pay swaps
on all accounts, great charting, EA
compatible (THT)
What is a SWAP?
• Swap (rollovers) is a debit or credit paid or earned as a
reflection of the varying interest rates applicable to
currency pairs. When trading the USD/JPY for example,
swap interest rates will be determined based on the
interest rates of the countries being represented by this
pair. Depending on whether you are long or short and
which country has higher interest rates, you may be
charged or credited interest. Essentially, when a trader
holds a position over night they are subject to the
interest rates applicable to the currency pair they are
trading.
• To earn a positive rollover, you must be
long the currency paying the higher
interest rate.
• USD/JPY—US rate is 5.25% and JPY rate
is .5%
• NZD/USD—NZD rate is 7.25%
• If you are short the currency paying the
higher interest rate, you will have a
negative rollover—you pay.
When are swap rates calculated?
• Swap rates are calculated daily at 4:59
EST. Trades that have been opened
before 4:59 EST and held open past this
time will be subject to swap rates. Swap
rates are tripled on Wednesday at 4:59
EST.
Why are swap rates tripled on
Wednesday?
• When placing a trade in the spot Forex market,
the actual value date is two days forward. A deal
done on Thursday is for value Monday. A deal
done on Friday is for value Tuesday, and so on.
On Wednesday the amount of swap is tripled in
order to compensate for the following weekend
(during which time swap is not charged because
trading is stopped for the weekend).
What does MM think?
• Tip 9 – Carry trades are great, these are trades where your
objective is a combination of high interest income and some capital
appreciation. If you buy a pair the high interest payout country must
be on the left. For example if you buy the AUD/JPY you are paid the
interest differential daily and it is quite large. These are buy and hold
trades and more like investing rather than trading where interest
accumulation gives you daily and weekly income. Start following
interest rates of the various countries and regions if you are
interested in this type of investing. You can also papertrade to
witness how the interest accumulates. This an excellent trading style
for persons who have less time to trade in their schedule. Also
consider using a broker with leverage of 200:1 or higher on these
types of trades.
Swap/spread comparisons
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Mini account swap rates for Interbankfx
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Symbol
EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
AUD/USD
NZD/USD
EUR/GBP
EUR/JPY
EUR/CHF
GBP/CHF
GBP/JPY
AUD/JPY
CHF/JPY
EUR/CAD
EUR/AUD
AUD/CAD
AUD/NZD
NZD/JPY
Buy
$-0.60
$1.35
$-0.04
$0.89
$0.22
$0.11
$0.32
$-0.70
$0.85
$0.50
$1.66
$2.05
$1.05
$0.14
$-0.38
$-1.07
$0.29
$-0.26
$1.05
Sell
$0.54
$-1.43
$0.03
$-0.94
$-0.35
$-0.24
$-0.37
$0.49
$-1.12
$-0.67
$-2.06
$-2.65
$-1.31
$-0.33
$0.28
$0.91
$-0.39
$0.20
$-1.35
spread
3 pips
3 pips
4 pips
4 pips
5 pips
5 pips
5 pips
4 pips
4 pips
4 pips
7 pips
8 pips
8 pips
7 pips
8 pips
8 pips
8 pips
11 pips
8 pips
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FXCM—hedging, no dealing desk platform
Receive swap regardless of margin level
Symbol
Buy
Sell
spread
EUR/USD
$0.59
2-3 pips
USD/JPY $1.35
3 pips
GBP/USD
$0.04
4 pips
USD/CHF $0.89
3 pips
USD/CAD $0.29
4 pips
AUD/USD $0.17
3 pips
NZD/USD $0.39
4 pips
EUR/GBP
$0.52
2 pips
EUR/JPY
$1.14
2-3 pips
EUR/CHF $0.56
2 pips
GBP/CHF $1.70
5-6 pips
GBP/JPY
$2.61
4-13 pips
AUD/JPY
$1.24
5 pips
CHF/JPY
$0.34
5 pips
EUR/CAD
$0.19
6 pips
EUR/AUD
$0.91
7 pips
AUD/CAD
$0.40
7 pips
AUD/NZD
NZD/JPY
$1.30
8 pips
CAD/JPY
$0.89
5 pips
Interesting?
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Forex.com
EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
AUD/USD
NZD/USD
EUR/GBP
EUR/JPY
EUR/CHF
GBP/CHF
GBP/JPY
AUD/JPY
CHF/JPY
EUR/CAD
EUR/AUD
AUD/CAD
AUD/NZD
NZD/JPY
CAD/JPY
BUY
-$1.20
$0.68
-$0.60
$0.33
-$0.26
-$0.40
-$0.20
-$1.77
$0.51
$0.08
$1.16
$1.78
$0.68
-$0.25
SELL
-$0.20
-$1.86
-$0.80
-$1.49
-$0.95
-$1.00
-$1.20
-$0.98
-$1.70
-$1.24
-$2.31
-$2.97
-$1.86
-$0.93
-$1.45
$0.32
$1.35
-$1.45
SPREAD
3 pips
4 pips
5 pips
5 pips
5 pips
4 pips
4 pips
3 pips
4 pips
5 pips
9 pips
9 pips
7 pips
6 pips
8 pips
8 pips
8 pips
6 pips
• Personally, I don’t think you are going to get rich
with swaps. But it is good to be aware of the
swap rates when you are deciding whether to
hold or close a trade before the update.
• On Wed., I have traded the GBP/JPY just before
the update—long position when charts look
good, I close it right after the update and earn a
few pips and triple positive swap of $2.61 X
3=$7.83 per mini lot. Just make sure the charts
look decent.