noob question... | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

noob/noob-like question about ROI in forex 2 replies

noob question about carry trade 2 replies

NOOB question, plz help 3 replies

Noob question about Money Management 21 replies

A noob question on hedging 2 replies

noob question...

  • #1
  • First Post: Jan 3, 2007 5:40pm Jan 3, 2007 5:40pm
Just a quick question. I'm new to forex trading and decided to use new software, MetaTrader looked like a good starting point.

My question is, when I have outstanding trades I get negative trades show up in my account when the period rolls over 23.59. Is this normal in Forex trading as my normal trading doesn't do this. The broker I am using is the basic Alpari one from the setup.

Should I look for another broker who doesn't do this or is it normal?

Thanks in advance,

D.
  • #2
  • Jan 3, 2007 5:56pm Jan 3, 2007 5:56pm
Quoting bluefrog
Just a quick question. I'm new to forex trading and decided to use new software, MetaTrader looked like a good starting point.

My question is, when I have outstanding trades I get negative trades show up in my account when the period rolls over 23.59. Is this normal in Forex trading as my normal trading doesn't do this. The broker I am using is the basic Alpari one from the setup.

Should I look for another broker who doesn't do this or is it normal?

Thanks in advance,

D.
Yes, this is normal. These are rollover interest charges, that are incurred when you hold a trade over the end of the day, (usually 5pm EST).

The amount of the charge is a function of the differential between the two countries interest rates for the currency pair being traded. Depending on which half of the currency pair has the higher interest, and the direction of the trade (long or short) you will sometimes have to pay the charges (a negative value) and sometimes you will be paid the charges (a positive value). Some brokers are not nice and charge you both ways, even when they should be paying you.

FYI, there are advanced strategies where a basket of currencies are traded together to neutralize (as near as possible) the effects of currency movements and make profit on the rollover interest.

Does this help?

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #3
  • Jan 4, 2007 1:33am Jan 4, 2007 1:33am
Quoting bluefrog
Just a quick question. I'm new to forex trading and decided to use new software, MetaTrader looked like a good starting point.

My question is, when I have outstanding trades I get negative trades show up in my account when the period rolls over 23.59. Is this normal in Forex trading as my normal trading doesn't do this. The broker I am using is the basic Alpari one from the setup.

Should I look for another broker who doesn't do this or is it normal?

Thanks in advance,

D.
Dial explained rollover interest charges well. Since you mention Alpari. If your question is why the trades are closed and re-opened read this thread http://www.forexfactory.com/forexfor...ad.php?t=11953
This is not the way most other MT4 brokers handle rollover.
  • #4
  • Edited 4:11pm Jan 4, 2007 3:56pm | Edited 4:11pm
Many thanks, forex trades much differently to stocks. I may have to rethink my strategy on this as I'm a long term trader and trades often close with negative equity.

Any suggestions of a good trading strategy which is easy to pick up and run with, which has several smaller trades in a day so I can close all positions at day end?

lol, not asking much really

D.

On a side note can I get my stock charts streamed into metatrader? Or can I get a broker who handles stock & Forex? I actually prefer it to Metastock - free beats fee, go figure!
  • #5
  • Jan 4, 2007 4:20pm Jan 4, 2007 4:20pm
Simple and right to the point.
Quoting diallist
Yes, this is normal. These are rollover interest charges, that are incurred when you hold a trade over the end of the day, (usually 5pm EST).


The amount of the charge is a function of the differential between the two countries interest rates for the currency pair being traded. Depending on which half of the currency pair has the higher interest, and the direction of the trade (long or short) you will sometimes have to pay the charges (a negative value) and sometimes you will be paid the charges (a positive value). Some brokers are not nice and charge you both ways, even when they should be paying you.

FYI, there are advanced strategies where a basket of currencies are traded together to neutralize (as near as possible) the effects of currency movements and make profit on the rollover interest.

Does this help?

Dial
  • #6
  • Jan 4, 2007 4:38pm Jan 4, 2007 4:38pm
Rollover charges are a very minimal fee to do business at the end of the day in forex. I think you should ignore them at this point in your trading. In fact, right now you should convince yourself that in the long term these rollovers mean nothing at all. Sometimes you will be charged interest, sometimes you will be paid interest. The last thing you want to do is base your trading techniques on rollover.
  • #7
  • Last Post: Jan 4, 2007 4:56pm Jan 4, 2007 4:56pm
You know, actually after re-checking the demo account I agree. Although the trades are stopped out and renewed + a couple of interest pips, it doesn't actually affect the trade too much, wasn't reading the balance - just seeing the negative figures lol

Thanks to everyone who answered this post, much appreciated and I'm sure I'm not the only one who will benefit from your wise answers

D.
0 traders viewing now