Beginner question about MT4 and trading in General.

Hey, Im a new trader. Im doing just Demo at the moment and plan to keep it that way untill Im able to make a consistent profit there. However, I have a question. Im learning to trade with the Vegas Wealth Builder on the daily chart as my foundation for my strategy. Then Im learning Candlestick patterns in general to know when to execute the trades.

My real question: In the MT4's trading terminal there is a colum named swap. What is this, is it intrest the broker charges me? At the moment Im short in USD/JPY and I have 34 pips in profit so far. The swap colum says -1.80 though, and it seems to eat from my profit somehow. Could anyone please explain this to me?

Thanks up front and sorry for my lousy english.

A swap is basically the interest charged or given on an open position. When there is a difference in the interest rate of one of the currencies of a pair, then any open positions at the end of the trading day are subject to pay or receive the difference in interest.

For example if you bought USD and sold JPY open positions at the end of the day will earn you a positive swap, since the USD interest rate is higher than the JPY. If you sold USD and bought JPY any open position at the end of the day will cost you a negative swap.

Best of luck.

Thanks for clearing that up.

By the way, Nybegynner, your English is perfect. English being a second language for me, I'm very sensitive to bad spelling, grammar errors, and overall sloppiness in written word, and I'm telling you - you don't need to worry a bit. In fact you might want to throw an error here and there to better fit this forum... just kidding.

It is when you are excusing yourself that people start analyzing your language skills...

Welcome to the FF forum!

Dane

Hi Ny,

First, your English is great. No need to apologize for something that good!

Second, Mishnas gave you a good answer, but I wanted to mention that some brokers charge you interest even when they're supposed to be paying you. Depends on the broker and sometimes on your account size or lot size.

Let me know if I can be of any help to you.

Dial