In forex trading, as you know the trading day is considered to start at 5 PM EST till 4:59 pm the next day. So if you have a trade which was not closed on the same trading day, then the broker will provide the forex rollover credit/debit depending on the interest rate prevailing in the currencies involved in the trade.

So, lets say you opened a EUR/USD trade at 2 PM today that you don't close by 5 PM, then your broker will check the bank interest rates of EUR and of USD. Since in this case you have bought EUR by selling USD, you'll earn the interest on EUR, but will give the interest of USD to broker.

So, if EUR interest is 1% and USD interest is 0.7%, your net gain is 0.3% (1-0.7) and you'll receive the Rollover credit applied to your trading account.

Few points related to Forex Rollover Credit/Debit -

1. The rollover values fluctuates since bank interest rates doen't remain the same across trading days.

2. This concept of rollover credit and debit is primarily applicable to swing trading where the trade lasts for days/weeks/months. If you are day trading, then you won't have to worry about this at all since the typical day trades happen between 1 AM to 3 PM EST.

3. Even though there is money involved, the trade decisions by individual traders are not that much influenced by the rollover credits. The trade decisions are based on technical analysis. Profit/Loss  from Forex Rollover credits/debits values is very low as compared to profit/loss made by currency movement.

Feel free to post your thoughts in the Comments..

Here you can see a Forex Swing Trading System that you would like!

What the understanding I got, I thought I must share with my readers.

What is Credit Default Swap?

In simple terms Credit Default Swap is a protection that a country uses to protect its economy. Let us take the case of auto insurance. You make monthly payments to a company inreturn for the company to cover the expenses incase something happens to the car.

Similarly, in Credit default swap the underlying country makes a monthly payment in return for protection in case the economy collapses.

How does Credit Default Swap helps in trading forex?

Credit Default Swap helps in understanding how strong is the economy. Just like the premium of health insurance is dependent on the health of the person, the value of Credit default Swap premium (known as Credit Default Swap Spread) tells how good the economy is. The higher the value, the more risky is the economy.

So, if you know the value of Swap spread, you can very well understand how strong the underlying currency is and which direction should the currency pair move!

Please leave your comments or questions.

Also, if you like the article, let your friends know through facebook/twitter etc..

and that is what kind of trader are you or would you like to be.

1. Would you like to swing trade - Which means trading on large timeframes with trades lasting
from few hrs to few days?

2. Forex Day trading - This is about trading on smaler time frame like 15 min chart or 30 min chart
with each trade lasting for few minutes to may be 3-4 hrs.

3. Forex Scalping - small quick profits from trades that are only for few minutes.

Before you decide, you need to take various points into consideration.
Let me mention some points  -

1. Risk Appetite per forex trade - First and foremost is, How much risk are you willing to take? By this
what I mean is how much are you ready to loose per trade if your trade end in loss?

For example, if you can risk only 25-30 pips per loss, then definitely swing trading is
out of question since a swing trade woulkd require a stop loss of more than 50-55 pips.
In that case  perhaps forex day trading and scalping will be more suitable.

2. How many hrs per day can you spend - If you can spend only 1-2 hrs per trade, then definitely forex swing
trading may be more suitable option. For example, trading on a daily chart requires only 15-20 min every day
while day trading on other hand will require about 2-3 hrs in minimum considering you need to watch
charts, open trades, adjust stop loss, close the forex trade etc…All in same day.

But day trading will present you more opportunities in a week than swing trade.

3. Your profit temprament - Do you like profits on a daily basis even though they are small or are you ready to
have profits once or twice a week but those profits are big profits?

Small profits on daily basis are good if you like motivation to trade, as they keep you energized. If so, forex scalping
and forex day trading are more appropriate.

However if you like large profits, then yes, swing trade may be more suitable.

These are just some points..there can be more that you may want to consider.

So, I guess y reading this article, you may have realized that forex trading style requires some thought
and will assist you in secelcting a good forex trading system

Only to see that the market reverse and hit your stop loss?

And whats more, after some time the market moves in the direction you
expected it to go initially and forms a big trend..But

But, you didn't take this trade because you were just not sure if the
currency pair will form a good trend because of your experience last time.

It doesn't feel good when this happends..isn't it?

Now what was the issue behind this whole experience?

One primary issue was that the trader may not have been aware if the
entry point in the 1st trade was correct point of reversal or not..

It is not secret that correct identification of entry and exit points
in a trade is extremely important.

If entry point is not identified correctly, the trade may end in loss or very
little profit.

But, there is a nice neat technique that is being used in Forex Trend Rider
system through which these entry points are being identified very accurately

and due to this the Forex Trend Rider System is extremely profitable!

Let me tell you, it won't be long before you can get your hands on this system.

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 Please feel free to leave comments about the Forex Trend video or if you have any questions

So, next the legitimate question is how do the economists judge the economic strength?

Well, they used a basket of indicators to judge. The indicators are called as "Leading Economic Indicators"

Lets look at them briefly -

1. Initial Jobless Claims - By far one of the strongest indicators to judge how good is the economy. This indicator is used to influence the inflation and is also a component of Non Farm Payrolls.

2. Philadeplphia Fed Manufacturing Index - Frankly, I don't know its significance. If  you know, please share in the comments!!

3. New York Stock Exchange Index - Forex Market influences stoock market and Vice-versa. NYSE index is basically a way to tell what is the confidence level among investors to spend or invest money! A highly liquid market would mean that money is circulating. However a highly liquid market which is also controlled by bears would mean that investors are not confident of economy!

4. Commodities Market - Oil price naturally impacts the entire economy and is so powerful that it can drive the entiore election campaigns during election season! Alomg with it, price of gas and energy sectors is also considered.

5. Metal Prices and US Bonds - Gold, Silver, copper and platinum are the metals whose prices are considered to judge strength of economy. Also, US bonds prices are also monitored.

So, as you can see, it takes a lot of indicators to check how good is the economy and what factors should be changed like interest rates etc. to bring an ecomony on course which might be deviating.

So, it is all but natural that forex market is highly susceptible to such fundamental news releases.

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