March 24 (Fri): Nikkei 225 (Course: How to think about swaps?)

Good morning ⛅

Today I received a questionabout 'swaps'I would like to discuss it.

I hold positions for several weeks to several months.

Therefore the question often is

"Will you hold long-term with negative swaps?"

To give you the conclusion first,"I will hold."

There are several reasons.

① If you do not trade with negative swaps, your trading direction will be restricted, resulting in opportunity loss.

② Since I use "swing trading" (unraveling market moves), hedging on both sides is the basic approach. Therefore, there are no instruments with both sides offering positive swaps in the broker I use.

※It seems some brokers may offer this.

Thus, swaps are basically negative, but

I consider them like 'fees'and trade without particular worry.

"Account: Do you look at pips or the amount?"

https://www.gogojungle.co.jp/finance/navi/articles/52052

In that article I discussed looking at pips,

while trading I use an MT4 indicator that shows how much is currently in profit or loss (blue for positive, red for negative pips), so I do not monitor the exact profit/loss amount or swap amount.

It’s true that when unrealized losses are large and swaps are negative, you might feel like cutting losses.

Later, as unrealized gains appear and swaps approach zero or a small profit, you might feel like exiting to take profits.

That isProspect Theory, isn’t it?

If you follow your instincts, you inevitably act that way.

But is that according to your initial trading plan?

・Entry point

・Take profit point

・Stop loss point

You planned to enter with consideration of risk-reward.

As days pass and negative swaps accumulate, exiting would deviate from basic trading principles, right?

If you absolutely worry about swaps, then

① Pre-calculate swaps as approximate unrealized loss

② Trade by looking only at pips

and take preventive measures in advance, I recommend?

（Note: the following is limited to members only.）