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Forex question What is this Swap and Commission in MT4 exactly?
avatar Phoebe
Question by: Phoebe - 07 Nov 2016, 23:07:58
What is this Swap and Commission in MT4 exactly?
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Answers (1)
avatar user 11352
Answer by: JustinJones - 07 Nov 2016, 23:12:50

The SWAP is financial charge which apply always when a position is held open during the night. These charges are not from the broker, but are coming from the bank institutions and the liquidity providers. Moreover, the swap could be positive or negative depending on the swap rate of the instrument you are trading. You could calculate your swap cost for any position using the following formula: Swap charge = (Volume of the order * Swap Rate * Number of days) Let’s take an example with 1 standard lot of GBPUSD with an example swap rate for short position of -2.5. Then the Swap charge = 1lot * (-2.5) *1day = -2.5 GBP. This will be the amount charged from your account for holding this position for 1 night. Further to your second question the commission in the MT4 is the commission charged from your broker for every executed trade. It depends on the conditions of the broker you are using. Hope that was helpful! Cheers!

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