forex-scalping.com

Spot forex settles two business days after the trade date. Hold a position through the daily rollover and the broker pushes the settlement date forward by one day. Most days that's one calendar day, so one day of swap.

Wednesday is different. A trade rolled on Wednesday moves from a Friday settlement to the following Monday, which is three calendar days. So the broker charges or credits three days of swap in one hit. Some brokers apply the triple on other days for certain instruments, and metals or indices often follow their own calendar, so the schedule isn't universal.

Here's why scalpers shouldn't wave it off. The charge only applies if the position is open at the rollover, around 17:00 New York time. That's 22:00 GMT or 23:00 WAT in winter. A six-minute trade opened at 22:57 WAT on a Wednesday can pick up a charge that a trade closed ten minutes earlier never sees. On a pair with a wide interest rate gap, that debit can outweigh a small scalping target.

Look at the swap columns for the pair on the platform, long and short. One side is often a credit and the other a hefty debit.

Do you check the Wednesday swap before holding anything near the rollover, or has it ever caught you out on a quick trade?

It caught me out exactly once, which was enough. I had a short scalp on a pair with a big interest rate gap open just before rollover on a Wednesday, meant to be a few minutes. It ran a bit longer than planned, crossed the rollover, and the triple swap ate more than half of what the trade made.

Since then I keep a simple rule. Nothing opened in the last half hour before rollover on any day, and on Wednesdays I'm flat even earlier. I also had a look at the swap table for every pair I trade and noted which side is the expensive one, so I know where the risk is.

What surprised me was gold on my broker, which had the triple on a different day from the currency pairs. I'd assumed it was the same everywhere. Worth checking the contract specification for anything that isn't a plain currency pair.