Learn Forex How to Calculate Swap

The world of Forex, we are free to determine when we take or closing / liquidation of open positions. There are times when we do not want to close the open position even though the trading day immediately closed (overnight). When this happens, usually the broker will charge a fee to stay or commonly called the Interest Rate (Swap).

Or the Interest Rate Swap is charged or given if it has an open position in excess of one trading day and only applies to the product only rolling contract. In the trading platform MetaTrader, the swap has been calculated automatically. But where the actual figure was obtained? Let's learn how to calculate it.

Swap calculation formula is as follows:

Where: i = constant rate, and H = the weight of the day

The constant rate (m), or can be called interest rate is usually updated on Monday, the amount you can check on the trading platform by right-clicking the boxed market watch, click on the symbol, select the symbol that you want to check the interest rate is, click properties and will appear box the symbol specification, a check on the swap long to buy and swap short to short positions.

The weight of the (H) is the value of each day of the week, but we need to consider, especially for Wednesday to Thursday are considered overnight 3 days, while for Fridays to Mondays only considered to be one day only.

For more details see the following picture:

Example:

We do the transaction BUY on Monday at 18:00 pm, and the position that we close on Tuesday at 02.00 pm the next day (early morning), then we HAVE NOT experiencing overnight transactions.

We do the transaction BUY on Tuesday at 2:00 pm (early days), and we close the same day but at 06:00 pm, so we HAD to experience overnight transactions a day.

We do the transaction BUY on Wednesdays at 23:00 pm, and then we close Thursday at 06.00 pm the next day, then the transaction we experienced overnight HAS THREE days.

We do the transaction BUY on Thursday at 02.00 pm (early days), and we close the same day at 06.00 am, the transaction we experienced overnight HAS THREE days.