Interest Wednesdays
It is important to be aware of interest charges or rollover that brokers charge everyday at the end of the NY session. For some currency pairs, it is a negligible amount: for the EURUSD, my broker only charges $9.25 for each standard lot rolled over at close of the New York session. But for some pairs, like JPY pairs, brokers charge up to $30 per standard lot that is rolled over each day. On Wednesdays each week, brokers double or even triple the interest/roll over charges. They do this because it represents the rollover that would have been charged on the weekend for positions held. Why is this important? For me and my trading strategy, I usually make sure that I am out of all trades by the time rollover is charged, because I do not like to give up those hard earned dollars, especially on Wednesdays. But if you are a swing or longer term trader, you may encounter these rollover charges often. There are strategies, however, that utilize the interest rollover each day. But you must have a high leverage on your account so that you are collecting the interest, instead of paying the interest, each day. I personally do not trade this way, but some have fantastic profits with little time spent watching their trades. To learn more about high leverage trading, search for “forex high leverage hedging” on google or yahoo. Good trading!
December 17th, 2007 at 6:06 pm
Hey!! Found your blog on yahoo - thanks for the article but i still don\’t get it, Ronny
December 20th, 2007 at 1:56 pm
Hi Ronny, well trading forex is very complex. If you are questioning this specific entry about interest Wednesdays, my main point I wanted to get across was that traders should be aware that on Wednesdays broker will double or triple their rollover fees or interest to their traders when they keep an open position in the market past the New York session close. If you have further questions about this, please be more specific.