I closed a trade with 19 pips profit but I lost money on it | Forex Factory

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I closed a trade with 19 pips profit but I lost money on it

  • #1
  • First Post: Mar 16, 2017 3:47pm Mar 16, 2017 3:47pm
Hello, today I closed my first trade ever and I don't understand why I lost money on it since it was supposed to be on the profit side. I have my account shared with you. I was supposed to earn 1.86 USD but I ended with -0.14 USD. It says "swap" -2 usd whaterver that means. Could anyone please, kindly explain what happened with my trade? Thank you!
Is forex rocketscience? Yes it is.
  • #2
  • Mar 16, 2017 4:01pm Mar 16, 2017 4:01pm
You pay a swap if you keep the trade overnight.
Amount is different with every broker.

"In Forex, when you keep a position open through the end of the trading day, you will either be paid or charged interest on that position, depending on the underlying interest rates of the two currencies in the pair.

Source: alpari.com, "What happens when I leave my Forex positions open overnight?"
  • #3
  • Mar 16, 2017 8:01pm Mar 16, 2017 8:01pm
Quoting on64
Hello, today I closed my first trade ever and I don't understand why I lost money on it since it was supposed to be on the profit side. I have my account shared with you. I was supposed to earn 1.86 USD but I ended with -0.14 USD. It says "swap" -2 usd whaterver that means. Could anyone please, kindly explain what happened with my trade? Thank you!
The indicator below will show all open positions. Profit/loss is calculated with all swap & commission charges included so you can see when you're in profit.

***Change the settings if you don't want to see the break-even line on the chart.
Attached File(s)
File Type: ex4 Show_BreakevenLevel.ex4   18 KB | 473 downloads
File Type: mq4 Show_BreakevenLevel.mq4   4 KB | 464 downloads
  • #4
  • Mar 16, 2017 10:25pm Mar 16, 2017 10:25pm
Take a look at your broker's page where swaps are defined
https://www.icmarkets.com/forex-trad...ns/swap-rates/

You kept this position for 38 days and swap is charged on daily basis.
  • #5
  • Mar 16, 2017 11:06pm Mar 16, 2017 11:06pm
Quoting on64
Hello, today I closed my first trade ever and I don't understand why I lost money on it since it was supposed to be on the profit side. I have my account shared with you. I was supposed to earn 1.86 USD but I ended with -0.14 USD. It says "swap" -2 usd whaterver that means. Could anyone please, kindly explain what happened with my trade? Thank you!
Here is a table to put it into context regarding a simple medium term trend following strategy with an average holding period of 90 days per trade.

Attached Image (click to enlarge)
Click to Enlarge Name: Capture.JPG Size: 544 KB


Don't worry about the total results as this particular strategy did not perform well over the 17 year period, but it is simply being used to illustrate a point regarding holding costs on medium-long term trading strategies.

Now note column G and the total Gross Profit for the portfolio of $94,835. Over 44 instruments (markets) for the 17 year period 22 were winners and 22 were losers. Without taking into account frictional costs, at least the strategy itself offered a slight positive return across the portfolio.

Now refer to columns G and H. Column G represents total commissions on 1,126 trades over the period of ($19,142). Column H represents total holding costs (or SWAP for forex) of ($57,655).

Excluding slippage, what was initially a Gross profit of $94K now reduces to a very marginal insulting profit of $18K.

The lesson is that holding costs (particularly in this current interest rate environment) are a killer for long term strategies. That's why trading leveraged instruments such as forex and CFD's under a long term trend following model in this current market interest rate environment probably should be avoided unless of course that your strategy proves to have a significant edge after transaction costs, or alternatively you are fortunate to be trading instruments offering positive swap.
  • #6
  • Mar 17, 2017 1:59am Mar 17, 2017 1:59am
Thank you all for your responses. I will try from now on to hold my position on shorter timeframes.
Is forex rocketscience? Yes it is.
  • #7
  • Mar 17, 2017 11:59pm Mar 17, 2017 11:59pm
Quoting on64
Thank you all for your responses. I will try from now on to hold my position on shorter timeframes.
Or (and) for bigger profit.
  • #8
  • Mar 18, 2017 5:25am Mar 18, 2017 5:25am
look for broker with swap fee option.
Self discipline It is a practice
  • #9
  • Apr 8, 2017 9:19am Apr 8, 2017 9:19am
Quoting on64
Hello, today I closed my first trade ever and I don't understand why I lost money on it since it was supposed to be on the profit side. I have my account shared with you. I was supposed to earn 1.86 USD but I ended with -0.14 USD. It says "swap" -2 usd whaterver that means. Could anyone please, kindly explain what happened with my trade? Thank you!
There is a 0.75-1.0% Interest rate differential between the Euro & Dollar. You bought the lower IR (eur is 0.0%) and sold the higher IR (usd was 0.75%). 5 weeks of swaps add up.

The "carry" trade in Xxx/Jpy was a very profitable a while back. Buying Aud (7% interest in 2007) and sell the Jpy (<1% since 1996) just holding it long term would equal pips. The inverse would result in negative swap the longer it's held.
ForexOrderFlow.com Return This Year: 10.2%
  • #10
  • Feb 2, 2018 5:36am Feb 2, 2018 5:36am
Quoting on64
Thank you all for your responses. I will try from now on to hold my position on shorter timeframes.
Besides, you also can use swap free trading account! Personally, I don’t like to use swap account because, most of the time, it kills my profit!
  • #11
  • Feb 2, 2018 9:46am Feb 2, 2018 9:46am
Always check the swaps your broker has listed on their website before investing money with them.
In general, apart from making sure your broker is regulated it's a good idea to always read their terms and conditions in detail before committing to a live account.
  • #12
  • Feb 2, 2018 10:23am Feb 2, 2018 10:23am
Quoting mlawson71
Always check the swaps your broker has listed on their website before investing money with them. In general, apart from making sure your broker is regulated it's a good idea to always read their terms and conditions in detail before committing to a live account.
Yes it’s very much important! Because I see, few brokers have horrible swaps.
  • #13
  • Feb 2, 2018 12:34pm Feb 2, 2018 12:34pm
Quoting on64
Hello, today I closed my first trade ever and I don't understand why I lost money on it since it was supposed to be on the profit side. I have my account shared with you. I was supposed to earn 1.86 USD but I ended with -0.14 USD. It says "swap" -2 usd whaterver that means. Could anyone please, kindly explain what happened with my trade? Thank you!

Swap charge of 2 usd with profit of 1.86USD from 19 pips? There had to be tiny swap for that position, smells fishy I should say
  • #14
  • Feb 3, 2018 8:29am Feb 3, 2018 8:29am
Quoting available
{quote} Swap charge of 2 usd with profit of 1.86USD from 19 pips? There had to be tiny swap for that position, smells fishy I should say
You think he got scammed?
  • #15
  • Last Post: Feb 4, 2018 9:11am Feb 4, 2018 9:11am
Quoting srt
{quote} The indicator below will show all open positions. Profit/loss is calculated with all swap & commission charges included so you can see when you're in profit. ***Change the settings if you don't want to see the break-even line on the chart. {file} {file}
God bless you. Life saver.
You're going to pay a price for every bloody thing you do and don't do
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