Understanding Forex Rollover - DailyFX

Investor based in Europe trying to hedge currency risk

I'm currently investing in the S&P500 and I take a dollar-cost-averaging approach. I'm living in Europe but I have more faith in the American Economy than mine. The problem is that I don't want to take the risk of sabotaging my returns because of the currency pair EUUSD so I'd like to know if you guys have any advise on how to protect myself from that.
I am already familiar with two solutions:
1) Advice on the internet says go long on EUUSD but they never talk about forex rollover rates that eats your money when you hold a position for a long period of time.
2) I could buy an etf that is already currency hedged like the iShares IUSE but I'm not sure if it hedges the currency completely or not..
What would you guys do in my situation?
submitted by Azerty800 to investing [link] [comments]

Forex broker with good rollover rates?

Hi whats a forex broker with good rollover rates? I need to hold some trades for months at a time.
submitted by Techynot to Forex [link] [comments]

I am a professional Day Trader working for a Prop Fund, Hope I can help people out and answer some questions

Howdy all, I work professionally for a proprietary trading fund, and have worked for quite a few in my time, hope I can offer some insights on trading etc you guys might have.
Bonus for you guys
Here are the columns in my trading journal and various explanations where appropriate:
Trade Number – Simply is this the first trade of the year? The 10th?, The 50th? I count a trade
that you opened and closed just one trade number. For example if you buy EUUSD today and
sell it 50 pips later in the day and close out the trade, then that is just one trade for recording
purposes. I do not create a second trade number to describe the exit. Both the entry and exit are
under the same trade number.

Ticket Number – This is ticket number / order ID number that your broker gives you for the trade
on your platform.

Day of the Week – This would be simply the day of the week the trade was initiated

Financial Instrument / Currency Pair – Whatever Financial Instrument or currency pair you are
trading. If you are trading EUUSD, put EUUSD. If you are trading the EuroFX futures
contract, then put in Euro FX. If you are trading the emini S&P, then put in Emini S&P 500. If
you are trading a stock, put in the ticker symbol. Etc.

Buy/Sell or Long/Short – Did you buy or sell to open the new trade? If you bought something to
open the trade, then write in either BUY or LONG. If you sold(shorted) something to open a
trade, then write in SOLD, or SHORT. This is a personal preference. Some people like to put in
their journals as BUY/SELL. Other people like to write in Long/Short. My preference is for
writing in long/short, since that is the more professional way to say it. I like to use the lingo
where possible.

Order Type – Market or Limit – When you entered the trade was it a market order or limit order?
Some people can enter a trade using a combination of market and limit orders. If you enter a
trade for $1 million half of which was market order and the other half was limit order, then you
can write in $500,000 Market, $500,000 Limit as a bullet points.

Position Size / Units / Contracts / Shares – How big was the total trade you entered? If you
bought 1 standard lot of a currency pair, then write in $100,000 or 1 standard lot. If you bought 5
gold futures contracts, then write in 5 contracts. If you bought 1,000 shares of stock, then write
in 1,000 shares. Etc.

Entry Price – The entry price you received entering your opening position. If you entered at
multiple prices, then you can either write in all the different fills you got, or specify the average
price received.

Entry Date – Date that you entered the position. For example January 23, 2012. Or you can
write in 1/23/12

Entry Time – Time that you opened the position. If it is multiple positions, then you can specify
each time for each various fill, or you can specify the time range. For example if you got
$100,000 worth of EUUSD filled at 3:00 AM EST, and another $100,000 filled at 3:05 and
another $100,000 filled at 3:25, then you can write all those in, or you can specify a range of 3:00
– 3:30 AM EST.

Entry Spread Cost (in pips) – This is optional if you want to keep track of your spread cost in
pips. If you executed a market order, how many pips did you pay in spread.

Entry Spread Cost (in dollars) – This is optional if you want to keep track of your spread cost in
dollars. If you executed a market order, how many dollars did you pay in spread.

Stop Loss Size – How big is your stop loss size? If you are trading a currency pair, then you
write in the pips. If you are trading the S&P futures contract, then write in the number of points.
If you are trading a stock, then write in how many cents or dollars your stop is away from your
entry price.

% Risk – If you were to get stopped out of the trade, how much % loss of your equity is that?
This is where you input your risk per trade expressed in % terms if you use such a position sizing
method. If you risked 0.50% of your account on the trade, then put in 0.50%

Risk in dollars – If you were to get stopped out of the trade, how much loss in dollars is that. For
example if you have a $100,000 account and you risked 1% on a trade, then write in $1,000

Potential Reward: Risk Ratio – This is a column that I only sometimes fill in. You write in what
the potential reward risk ratio of the trade is. If you are trading using a 100 pip stop and you
expect that the market can reasonably move 300 pips, then you can write in 3:1. Of course this is
an interesting column because you can look at it after the trade is finished and see how close you
were or how far removed from reality your initial projections were.

Potential Win Rate – This is another column that I only sometimes fill in. You write in what you
believe the potential win rate of this trade is. If you were to place this trade 10 times in a row,
how many times do you think you would win? I write it in as percentage terms. If you believe
the trade has a 50% chance to win, then write in 50%.

Type of Inefficiency – This is where you write in what type of inefficiency you are looking to
capture. I use the word inefficiency here. I believe it is important to think of trading setups as
inefficiencies. If you think in terms of inefficiencies, then you will think in terms of the market
being mispriced, then you will think about the reasons why the market is mispriced and why such
market expectations for example are out of alignment with reality. In this category I could write
in different types of trades such as fading the stops, different types of news trades, expecting
stops to get tripped, betting on sentiment intensifying, betting on sentiment reversing, etc. I do
not write in all the reasons why I took the trade in this column. I do that in another column. This
column is just to broadly define what type of inefficiency you are looking to capture.

Chart Time Frame – I do not use this since all my order flow based trades have nothing to do
with what chart time frame I look at. However, if you are a chartist or price action trader, then
you may want to include what chart time frame you found whatever pattern you were looking at.

Exit Price – When you exit your trade, you enter the price you received here.

Exit Date – The date you exited your trade.

Exit Time – The time you exited your trade.

Trade Duration – In hours, minutes, days or weeks. If the trade lasts less than an hour, I will
usually write in the duration in minutes. Anything in between 1 and 48 hours, I write in the hours
amount. Anything past that and I write it as days or weeks as appropriate, etc.
Pips the trade went against you before turning into a winner – If you have a trade that suffered a
draw down, but did not stop you out and eventually was a winner, then you write it how many
pips the trade went against you before it turned into a profitable trade. The reason you have this
column is to compare it to your stop loss size and see any patterns that emerge. If you notice that
a lot of your winning trades suffer a big draw down and get near your stop loss points but turn out
to be a profitable trade, then you can further refine your entry strategy to get in a better price.

Slippage on the Exit – If you get stopped out for a loss, then you write in how many pips you
suffered as slippage, if any. For example if you are long EUUSD at 1.2500 and have your stop
loss at 1.2400 and the market drops and you get filled at 1.2398, then you would write in -2 pips
slippage. In other words you lost 2 pips as slippage. This is important for a few different
reasons. Firstly, you want to see if the places you put your stop at suffer from slippage. If they
do, perhaps you can get better stop loss placement, or use it as useful information to find new
inefficiencies. Secondly, you want to see how much slippage your broker is giving you. If you
are trading the same system with different brokers, then you can record the slippage from each
one and see which has the lowest slippage so you can choose them.

Profit/Loss -You write in the profit and/or loss in pips, cents, points, etc as appropriate. If you
bought EUUSD at 1.2500 and sell it at 1.2550, you made 50 pips, so write in +50 pips. If you
bought a stock at $50 and you sell it at $60, then write in +$10. If you buy the S&P futures at
1,250 and sell them at 1,275, then write in +25 points. If you buy the GBP/USD at 1.5000 and
you sell it at 1.4900, then write in -100 pips. Etc. I color code the box background to green for
profit and red for loss.

Profit/Loss In Dollars – You write the profit and/or loss in dollars (or euros, or jpy, etc whatever
currency your account is denominated in). If you are long $100,000 of EUUSD at 1.2500 and
sell it at 1.2600, then write in +$1,000. If you are short $100,000 GBP/USD at 1.5900 and it
rises to 1.6000 and you cover, then write in -$1,000. I color code the box background to green
for profit and red for loss.

Profit/Loss as % of your account – Write in the profit and/or loss as % of your account. If a trade
made you 2% of your account, then write in +2%. If a trade lost 0.50%, then write in -0.50%. I
color code the box background to green for profit and red for loss.

Reward:Risk Ratio or R multiple: If the trade is a profit, then write in how many times your risk
did it pay off. If you risked 0.50% and you made 1.00%, then write in +2R or 2:1 or 2.0. If you
risked 0.50% and a trade only makes 0.10%, then write in +0.20R or 0.2:1 or 0.2. If a trade went
for a loss that is equal to or less than what you risked, then I do not write in anything. If the loss
is greater than the amount you risked, then I do write it in this column. For example lets say you
risk 0.50% on a stock, but overnight the market gaps and you lose 1.50% on a trade, then I would
write it in as a -3R.

What Type of trading loss if the trade lost money? – This is where I describe in very general
terms a trade if it lost money. For example, if I lost money on a trade and the reason was because
I was buying in a market that was making fresh lows, but after I bought the market kept on going
lower, then I would write in: “trying to pick a bottom.” If I tried shorting into a rising uptrend
and I take a loss, then I describe it as “trying to pick a top.” If I am buying in an uptrend and buy
on a retracement, but the market makes a deeper retracement or trend change, then I write in
“tried to buy a ret.” And so on and so forth. In very general terms I describe it. The various
ways I use are:
• Trying to pick a bottom
• Trying to pick a top
• Shorting a bottom
• Buying a top
• Shorting a ret and failed
• Wrongly predicted news
• Bought a ret and failed
• Fade a resistance level
• Buy a support level
• Tried to buy a breakout higher
• Tried to short a breakout lower
I find this category very interesting and important because when performing trade journal
analysis, you can notice trends when you have winners or losing trades. For example if I notice a
string of losing trades and I notice that all of them occur in the same market, and all of them have
as a reason: “tried to pick a bottom”, then I know I was dumb for trying to pick a bottom five
times in a row. I was fighting the macro order flow and it was dumb. Or if I notice a string of
losers and see that I tried to buy a breakout and it failed five times in a row, but notice that the
market continued to go higher after I was stopped out, then I realize that I was correct in the
move, but I just applied the wrong entry strategy. I should have bought a retracement, instead of
trying to buy a fresh breakout.

That Day’s Weaknesses (If any) – This is where I write in if there were any weaknesses or
distractions on the day I placed the trade. For example if you are dead tired and place a trade,
then write in that you were very tired. Or if you place a trade when there were five people
coming and out of your trading office or room in your house, then write that in. If you placed the
trade when the fire alarm was going off then write that in. Or if you place a trade without having
done your daily habits, then write that in. Etc. Whatever you believe was a possible weakness
that threw you off your game.

That Day’s Strengths (If any) – Here you can write in what strengths you had during the day you
placed your trade. If you had complete peace and quiet, write that in. If you completed all your
daily habits, then write that in. Etc. Whatever you believe was a possible strength during the

How many Open Positions Total (including the one you just placed) – How many open trades do
you have after placing this one? If you have zero open trades and you just placed one, then the
total number of open positions would be one, so write in “1.” If you have on three open trades,
and you are placing a new current one, then the total number of open positions would be four, so
write in “4.” The reason you have this column in your trading journal is so that you can notice
trends in winning and losing streaks. Do a lot of your losing streaks happen when you have on a
lot of open positions at the same time? Do you have a winning streak when the number of open
positions is kept low? Or can you handle a lot of open positions at the same time?

Exit Spread Cost (in pips) – This is optional if you want to keep track of your spread cost in pips.
If you executed a market order, how many pips did you pay in spread.

Exit Spread Cost (in dollars) – This is optional if you want to keep track of your spread cost in
dollars. If you executed a market order, how many dollars did you pay in spread.

Total Spread Cost (in pips) – You write in the total spread cost of the entry and exit in pips.

Total Spread Cost (in dollars) – You write in the total spread cost of the entry and exit in dollars.

Commission Cost – Here you write in the total commission cost that you incurred for getting in
and out of the trade. If you have a forex broker that is commission free and only gets
compensated through the spread, then you do not need this column.

Starting Balance – The starting account balance that you had prior to the placing of the trade

Interest/swap – If you hold forex currency pairs past the rollover, then you either get interest or
need to pay out interest depending on the rollover rates. Or if you bought a stock and got a
dividend then write that in. Or if you shorted a stock and you had to pay a dividend, then write
that in.

Ending Balance – The ending balance of your account after the trade is closed after taking into
account trade P&L, commission cost, and interest/swap.

Reasons for taking the trade – Here is where you go into much more detail about why you placed
the trade. Write out your thinking. Instead of writing a paragraph or two describing my thinking
behind the trade, I condense the reasons down into bullet points. It can be anywhere from 1-10
bullet points.

What I Learned – No matter if the trade is a win or loss, write down what you believed you
learned. Again, instead of writing out a paragraph or two, I condense it down into bullet points. it
can be anywhere from 1-10 bullet points. I do this during the day the trade closed as a profit or

What I learned after Long Term reflection, several days, weeks, or months – This is the very
interesting column. This is important because after you have a winning or losing trade, you will
not always know the true reasons why it happened. You have your immediate theories and
reasons which you include in the previous column. However, there are times when after several
days, weeks, or months, you find the true reason and proper market belief about why your trade
succeeded or failed. It can take a few days or weeks or months to reach that “aha” moment. I am
not saying that I am thinking about trades I placed ten months ago. I try to forget about them and
focus on the present moment. However, there will be trades where you have these nagging
questions about they failed or succeeded and you will only discover those reasons several days,
weeks, or months later. When you discover the reasons, you write them in this column.
submitted by Fox-The-Wise to Forex [link] [comments]

Any of u guys got info about xm dot com something fishy they don’t disclose their xm mark up in long swap value rates

It’s this calc Trade size * closing price * ( +/- short term interbank rate - the xm mark up)
I’m not sure what to put there instead for the calc for my excel sheets Any help appreciated cheers
It’s for both stocks and forex over night rollover values
I asked em and they said it is not fixed rate and they can’t disclose the amount
submitted by lowkeeey to Forex [link] [comments]

Rollover fee / Carry trade

If I close my position right before my broker applies the rollover then re-open the position after, I wouldn't have to pay the difference in interest rates? For example, rollovers on Forex.com is applied at 5 PM ET. If I close the position at 4:58 and re-open the position at 5:01, I'm safe from the rollover fee? ... But obviously I'd have to pay the spread again.
submitted by pips_and_hoes to Forex [link] [comments]

Earning carry on bond trading

How do you earn carry on bond trading? I know you can earn the daily rollover rate on the interest rate spread in forex pairs, and I’ve heard of ppl doing it with bonds too. I just don’t know how that works. Anyone out here doing it?
submitted by djporter91 to bonds [link] [comments]

Taking Forex trades to hedge currency risk

I'd like to hedge my currency risk as I'm an European investor who invests in an S&P500 etf. I've been advised by multiple articles from serious sources on the internet that I should go long EUUSD in order to protect me from the negative consequences of the pair's volatility. I think EUUSD is likely to go higher and I do not want to take that risk anyway.
The problem is that they don't talk about rollover rates and other expenses that come with holding a forex position for a long period of time. I do not want to pay too much to hedge currency.
What would you do in my position?
submitted by Azerty800 to Forex [link] [comments]

19 Forex Trading Terms for Forex Beginners

Before going ahead with the forex trading, it is so very important to understand the essentials and basics of the same. As a newbie forex trader, having a basic understanding of common forex trading terms is recommended.
Here you can check out 19 most important and common trading terms used in the Forex world.
  1. PIP
  6. Margin Call
  8. LONG POSITION (Going Long)
  9. SHORT POSITION (Going Short)
  10. LOT SIZE
To know about these terms in detail, please visit - https://www.mmfsolutions.sg/blog/19-forex-trading-terms-2019/
submitted by vinr2018 to u/vinr2018 [link] [comments]

What am I missing? A (flawed) strategy on using interest rate differences and forex hedging?

I just can't figure out what's the catch. I must be missing something crucial, but I just don't see what.
Let's say I have savings in US dollars. (Alternatively, I can borrow USD at really low rates.)
Then, I can deposit money in a foreign bank account with insurance in a foreign currency. All legal and in solid banks.
Let's assume some currency of a developing country. High volatility, moderate to low political risks, high interest rates. (There are several such currencies I have in mind to diversify. I'm not talking about political risks at the moment, but I am aware of such.)
Let's say that such deposit would yield me 10% per year in that foreign currency.
The problem is of course the risk of that foreign currency losing value faster than the interest rate I'm getting paid in the currency.
If after the first year I get 10% more but that currency is devalued by 20% compared to USD, then I would end up with less dollars when converted back to US dollars.
To address that, I would simultaneously open a long position for USD/XXX with a forex broker (I would in effect sell back that XXX currency and buy USD, for as long as the position remains open.)
So, I would take US dollars, convert them to currency XXX, deposit at a foreign bank at high interest rate.
At the same time, I would go long for the same amount (notationally) of XXX. I would use little leverage to make sure I don't get a margin call. Part of the available US dollar savings would be used for that.
The lot size of USD/XXX would match what I would deposit in a foreign bank in XXX.
If XXX goes up compared to USD, then my long position loses me money, but I make it back when converting that foreign deposit back to USD.
If XXX goes down, then my bank deposit would be worth less, but I would make money on my long position.
There is roll cost and conversion spread (both for the trade and for the deposit) and there are political risks and there is still a risk of a margin call, if leverage is greater than one.
But theoretically, I could even do with without leverage.
If I have, say, $200k. Then I would set aside $100k (plus the maintenance) for the forex broker. And would open a lot for that amount (minus the maintenance), and would convert a matching amount to XXX and then would deposit XXX.
The way I look at it, I would effectively be getting 10% interest in USD. Well, that would be 10% minus the associated costs. But the costs could still be less than 10%.
And risks as really limited only to political risks. I wouldn't invest in a country that's at war. But there are plenty of developing countries that pay 10%+ on deposits in their currencies.
But must be missing something. It can't be that simple.
So what am I missing?
Would the rollover completely kill any profit margin?
submitted by Aero72 to investing [link] [comments]

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101. How Rollover Works in Forex Trading What is Forex Rollover Lesson 6.1: What is swap in forex trading? - YouTube What is a rollover How to calculate Swap Rates in MT4  BlackBull Markets ...

A forex rollover rate is defined as the interest added or deducted for holding a currency pair position open overnight. These rates are calculated as the difference between the overnight interest rate for two currencies that a Forex trader is holding whether long (buying a currency pair) or short (selling a currency pair). Rollover rates displayed are based on a 10K position and estimated based on the previous rollover rate and number of days being rolled. For example, typically Wednesdays are rolled for three days to account for the weekend. Rollovers also may vary due to month end or holidays. Rollover Rate (Forex): A rollover rate, in regard to forex, is the net interest return on a currency position held by a trader. The rollover rate converts net currency interest rates, which are ... Rollover/swaps are charged on the client's forex account only on the positions kept open to the next forex trading day. The rollover process starts at the end of day, precisely at 23:59 server time. There is a possibility that some currency pairs may have negative rollover/swap rates on both sides (Long/Short). The rollover rate in forex is the net interest return on a currency position held overnight by a trader – that is, when trading currencies, an investor borrows one currency to buy another.

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101. How Rollover Works in Forex Trading

Discover today what EXACTLY is Forex rollover and how that impacts your trading account. **** FOREX COURSE IS NOW OUT **** ... Why are Interest Rates so Important for Forex Traders? - Duration: 5:43. Forex Swap - Rollover Rates - FX Market - Duration: 2:01. ThinkForex 6,013 views. 2:01. Forex SWAP - What is Swap Rate in Forex Trading? - Duration: 12:55. Federico Sellitti 3,842 views. In this video, we show you how to calculate swaps in monetary value (as per your base currency) from the MT4 points in the specifications. The general form... Forex Rollover and Swap - Duration: 33:25. Shaun Overton 20,401 views. 33:25. Beginner's guide to investing: the currency markets - MoneyWeek Investment Tutorials - Duration: 15:04. Get more information about IG US by visiting their website: https://www.ig.com/us/future-of-forex Get my trading strategies here: https://www.robbooker.com C...