What is Swap on MT4? How to find Swap rates on MT4?

TutorialsMarch 21, 2022

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Trading fees are one of the top concerns that are often overlooked by many traders when choosing an exchange. With each trade, you will have to pay a fee that includes fees, commissions, and sometimes swaps. Swap fees are a rather special type of expense, and traders can take advantage of them to make even more profits. So what exactly is the swap on MT4? How to view swaps on MT4? And strategies to utilize swaps to increase profits.

What is Swap on MT4?

Swap, also known as the overnight fee, is part of the cost that investors have to pay to the forex broker if they want to hold a position overnight.

What is Swap on MT4? How to find Swap rates on MT4?

When trading forex, we will buy and sell currency pairs, and each currency will have a different interest rate. There will be an interest rate differential when holding a currency pair overnight. Investors will receive a rollover fee if the buy rate is higher than the sell rate. Conversely, if the buy currency pair is lower than the sell currency pair, you must pay an overnight fee. This fee varies from exchange to exchange.

How to check Swap on MT4

After downloading MT4 to your computer, you just need to follow the following instructions to check the overnight fee.

  • Step 1: Go to the MT4 forex trading software, right-click on the Market Watch in the left corner of the screen and then select the corresponding currency pair that investors want to check the swap fee, select the item Specification.
  • Step 2: The system will display a table including Swap long (buying fee) and swap short (selling fee) parameters.
What is Swap on MT4? How to find Swap rates on MT4?

Swap charge time

The standard swap fee calculation time will fall between 22:00 and 24:00. In addition, depending on each floor, there will be separate time frames. Investors can find this information by reading the exchange’s regulations or asking the support staff.

For example, swap time is 22 hours. If you open a position at 21:49, overnight will be charged. But opening at 22:01 will not be set overnight. When trading, you also have to find out the exchange’s overnight fee to align the order correctly!

How to calculate Swap

Swap fees are charged when the US session is closed. Depending on each exchange and the leverage, there will be different swap levels. You can check this overnight rate on the exchange’s website.

In addition, you can also test right away on MT4. You will then apply this fee to calculate the overnight Swap as follows:

Swap = (Exchange rate/one point) x Volume (lot) x swap value in points

If the swap result is positive, you will benefit from this Swap, if the result is negative, your account will be deducted.

For example:

When trading the EUR/USD currency pair, the Swap for short positions is 0.01, and the long positions are -0.45. If a trader makes a sale of a standard lot of the pair on Thursday and keeps the position open overnight, on Friday, the Swap will be calculated as follows:

Swap = 100,000 x (0.01 x 0.0001 pips) = 0.10 USD.

With this short position, that will receive a profit of 0.1 USD.

In case an investor buys one standard lot of EUR/USD on Thursday and closes his position on Tuesday, the swap cost is calculated as follows:

Swap = 100,000 x (-0.45 x 0.0001 pip) = – 4.5 USD per night.

According to the above data, we will lose 4.5 USD per night, and currently, the position is held for three nights, so we have to pay a total profit of -4.5 x 3 = – 13.5 USD.

Assuming the same position is closed next Thursday, then 1 week will have 7 days, 5 weekdays, and two weekends. The interest to be paid is 7 x -4.5= – 31.5 USD.

As a general rule of Weekend Swap, fees will always be charged for any position opened on Wednesday. Therefore. For buy orders from Thursday to Tuesday next week, no weekend fee will be charged, so only 3 nights will be charged. But when you keep overnight on Wednesday, you will be charged the weekend fee. The fee will therefore be charged for 7 days.

How to take advantage of Swaps in Forex trading

If you are a trader who loves scalping, you may not need to care about swap fees. However, if you are looking for a long-term investment, you should learn about this fee. To be able to take advantage of this fee in investment transactions, you need to pay attention to the following points:

  • Choose to trade currency pairs with positive Swap

Investors should check the swap rates of currency pairs before making trades. Priority should be given to choosing pairs with swap fees to benefit from overnight trading.

  • Take advantage of the x3 Swap on Wednesdays.

On the fourth day, the Swap will multiply by 3, so you can earn a decent amount. It would help if you took advantage of this factor to conduct trades. In addition, you also need to pay attention to letting the stop loss stretch a bit to avoid being scanned because this is the time to start opening, so the spread will widen.

Above is detailed information on what swap fees are, how swaps are charged at exchanges, and some tips for traders to take advantage of swap fees during trading.

In general, investors can earn a decent profit if they know how to calculate and know the information about the overnight charge time. I hope this article will help traders in the trading process.


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