Rollover / Swap / Interest Policy
At 5:00 PM USA EST, funds are subtracted or added to accounts with open positions because of the automatic rollover. On MoneyForex Trader trading platform, the rollover interest is shown on the Dealing Rates window; represented with RlvS - Rollover for Sell position and RlvB - Rollover for Buy position.
Note: On Wednesdays, the amount added or subtracted to an account as a result of rolling over a position tends to be around three times the usual amount. This "3-day" rollover accounts for settlement of trades through the weekend period.
Thursday, July 3, 2008
Why does Rollover take place?
In the spot forex market, trades must be settled in two business days. If a trader sells 10,000 euros on Tuesday, the trader must deliver 10,000 euros on Thursday, unless the position is rolled over. As a service to our traders, MoneyForex automatically rolls over all open positions to the next settlement date at 5:00 PM USA EST. Rollover involves exchanging the position being held for a position expiring the following settlement date. The positions being exchanged are usually not valued at the same price. The amount of the difference varies greatly based on the currency pair, the interest rate differential between the two currencies, and fluctuates day to day with the movement of prices.
Rollover interest can provide an added stream of profit or loss to a client. As an example, a trader that believes the Great Britain Pound's exchange rate will stay roughly equal to the Japanese Yen's for the next year, will buy the GBP/JPY pair since the Pound has a higher interest rate and will accrue rollover interest. An account would be credited around $10 a day* for a standard GBP/JPY lot. If this trader's prediction comes true and the exchange rate is the same a year later, with fluctuations in between**, they would earn a year's worth of interest on the position. Since there are around 365 interest bearing days in a year, that one standard lot of GPY/JPY could potentially earn $3650 (365 � $10).***
* This rollover rate for the GBP/JPY is indicative of the rate on January 8th, 2007. (The actual rate for long GBP/JPY on that date is $14.12)
** This example assumes the position does not receive a margin call during these fluctuations.
*** The amount here assumes that the interest rate differential between the British Pound and Japanese Yen did not change through the year.
Rollover interest can provide an added stream of profit or loss to a client. As an example, a trader that believes the Great Britain Pound's exchange rate will stay roughly equal to the Japanese Yen's for the next year, will buy the GBP/JPY pair since the Pound has a higher interest rate and will accrue rollover interest. An account would be credited around $10 a day* for a standard GBP/JPY lot. If this trader's prediction comes true and the exchange rate is the same a year later, with fluctuations in between**, they would earn a year's worth of interest on the position. Since there are around 365 interest bearing days in a year, that one standard lot of GPY/JPY could potentially earn $3650 (365 � $10).***
* This rollover rate for the GBP/JPY is indicative of the rate on January 8th, 2007. (The actual rate for long GBP/JPY on that date is $14.12)
** This example assumes the position does not receive a margin call during these fluctuations.
*** The amount here assumes that the interest rate differential between the British Pound and Japanese Yen did not change through the year.
Mini Forex Trading
The MONEYFOREX Mini account was designed for those who are new to the forex market. The Mini forex account trades in smaller contract sizes of 10,000 units, which is 1/10th the size of the standard account. The smaller trade size gives traders the opportunity to trade live with less overall risk or exposure to the market. In addition, the Mini account allows traders to become familiar with MONEYFOREX, more specifically the quality and reliability of MONEYFOREX dealing practices and the stability of the MoneyForex Trader Trading Platform. 
important of Trading Strategy
Many traders will hold on to losses hoping it will reverse eventually, only to see the loss get progressively larger. The trading decisions are based on emotional reactions to fluctuating profits and losses, a common pitfall for new traders.
Because the pip value on the Mini Account is just $1 per pip, traders can focus on developing a disciplined trading strategy, basing decisions on pip movement and market conditions NOT P/L.
For Example: When trading a MONEYFOREX Mini account, a 50-pip floating loss is approximately $50. That same 50-pip move against you on the Standard Account now becomes a $500 floating loss. By starting with a Mini account- a trader loses only a small amount on every losing transaction making it easier to stick to a disciplined trading strategy. Generating larger losses on the Standard Account can be detrimental to new traders as the temptation to hold on to the loss is much greater based on the size of the loss
Because the pip value on the Mini Account is just $1 per pip, traders can focus on developing a disciplined trading strategy, basing decisions on pip movement and market conditions NOT P/L.
For Example: When trading a MONEYFOREX Mini account, a 50-pip floating loss is approximately $50. That same 50-pip move against you on the Standard Account now becomes a $500 floating loss. By starting with a Mini account- a trader loses only a small amount on every losing transaction making it easier to stick to a disciplined trading strategy. Generating larger losses on the Standard Account can be detrimental to new traders as the temptation to hold on to the loss is much greater based on the size of the loss
Start Small with 10,000 units
There is NO MAXIMUM trade volume on the MONEYFOREX Mini forex account. The standard default trade size in the platform is 100,000 units which equivalent to one standard lot. Therefore, for mini lot you need to adjust it to 0.1 lot in order to place 10,000 units. For instance, you can trade 10,000 units, 50,000 units or 150,000 units. This means as you become more experienced and build up confidence you can slowly increase the size of your positions to maximize profits. In fact the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade. The ability to customize the size of the trade enables better risk and account management. To place trade for mini lot, please change the lot amount setting to 0.1.The current default setting is 1 standard lot. The default setting located in the Total Account(s) Equity Window under "DA".
Ideal for Beginners
MONEYFOREX recommends that all traders with account balances less than $10,000 trade a Mini account. This gives you more staying power in the market, and the ability to take advantage of multiple opportunities without over-leveraging your account. Even if you are correct on the direction of the market, minor fluctuations can generate a margin call and liquidate a good position.
MoneyFOREX
MoneyForex is a unique commision free online forex trading system that allows you engage in trading on the world forex market. Using our forex trading system for foreign currency trading helps you keep up with the fast paced forex exchange.
As a premiere forex broker, MoneyForex offers global forex trading with all major currencies and cross rates. We also offer free real-time forex exchange rates, forex news, market forecasts and forex charts. We invite you to try our free online forex trading system demo. With our forex trading system, you can gain control over a desirable level of your risks and profits.
When you try online forex trading, using our forex charts with a demo-account, you'll see how MoneyForex is one of the world's leading online currency and forex broker, offering low pips and commission-free forex dealing.
Our dealing software which specialized in forex trading is rated second to none for it user friendly environment. Lightning speed and efficient execution is one of its many benefits.
As a premiere forex broker, MoneyForex offers global forex trading with all major currencies and cross rates. We also offer free real-time forex exchange rates, forex news, market forecasts and forex charts. We invite you to try our free online forex trading system demo. With our forex trading system, you can gain control over a desirable level of your risks and profits.
When you try online forex trading, using our forex charts with a demo-account, you'll see how MoneyForex is one of the world's leading online currency and forex broker, offering low pips and commission-free forex dealing.
Our dealing software which specialized in forex trading is rated second to none for it user friendly environment. Lightning speed and efficient execution is one of its many benefits.
Subscribe to:
Posts (Atom)