The Metatrader 4 is by far the most common trading platform for the Forex CFD market. Its mass adoption from the vast majority of FX traders and the brokerage industry, can surely be linked to its ease of use and its ability to create Expert Advisors (EA) which automate a trading process and, in some cases, make it possible to implement a successful trading strategy.
In this article we will cover every aspect of the Metatrader 4 platform but with a focus on the Swap rates.
Types of Swap rate
The type of Swap rate represents the way a Forex broker displays its Overnight rate values in the MT4 platform. There are four types of Swap rate available and they are listed below:
- Points
- Base currency
- Margin currency
- Percentage
The Points type is by far the most used by Forex brokers to show the Swaps of their tradable currency pairs; the second type is less common than the first one while the third and fourth type is only used by a small number of FX providers.
As you will discover later, the type of Swap rate not only affects the way that Overnight rate values are displayed in the MT4 platform but also the calculation method used to know how much money you make or lose due to the Swaps.
How to check the Swap rate type, values and the 3-days Swap
There are three ways to check the type of Swap rate employed by the broker, the Long/Short Swap values and the day when the triple Swap is applied for each single currency pair in the MT4 platform:
Method 1: If the currency pair you are interested in is in the “Market Watch” window, simply right click on the symbol and then click on “Specification”. A dialogue box will pop up with all the necessary information.
Method 2: If the currency pair you are interested in is not in the “Market Watch” window, right click on any symbol or the blank space of the “Market Watch” window and click on “Symbols”. Select the pair you are interested in and then click on “Properties”. The same dialogue box as before will pop up.
Method 3: If the “Market Watch” window is not opened in your MT4 platform, click on “View” in the top toolbar and click on “Symbols”. You can then proceed as explained previously.
How to calculate the amount earned or lost due to the Swap rates.
As the MT4 platform supports different types of Swap rate, the formulas employed to calculate the amount earned or lost over a given period as a result of the Swaps are different as well. All the formulas are listed below:
- For Swaps expressed in Points.
Trade Size * Tick size of the pair * Swap * n° of nights = Amount in quote currency of the pair
- For Swaps expressed in Base or in Margin currency.
Lots * Swap * n° of nights = Amount in base currency of the pair
- For Swaps expressed in Percentage.
[Trade Size * (Swap/100) * n° of nights] / 360 = Amount in base currency of the pair *
How to view the swap charged/credited amount
In the MT4 platform, you can keep an eye on the amount charged or accrued by the broker due to the Swap on each opened position in the “Terminal” window under the “Swap” column of the “Trade” tab. The amount appears as separate transaction so that you can have a clear view about how much money you are earning or losing exclusively from the Swap rates.
The same visualization model also applies for the amounts credited or debited on closed positions, however, in this case you have to move on the “Account History” tab of the “Terminal” window to see them.
* Please be aware that some brokers divide by 365 instead of 360.
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