Swap is an interest fee that is either paid or charged to you at the end of each trading day. When trading on margin, you receive interest on your long positions, while paying interest on short positions. The net interest difference is known as the carry and traders seeking to profit from this are known as carry traders. Positive carry results when you receive more in interest than you are required to pay, and is added directly to your account.
If the carry is negative, it is subtracted from your account. If you open and close a trade within the same day, the trade has no interest implications. That is, if we wanted to perform a carry trade on EURAUD, we would wait until the pair was trending down, sell into any strength and hold for the length of the down trend. Think of swap as an added bonus or incentive for holding a trade long term or in the case of negative swap, a deterrent.
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