Islamic (swap-free) accounts: benefits and pitfalls

First of all, it is worth mentioning that swap free tradingare not provided for traders from different countries except Islamic. The trader pays a fixed amount of the swap, which is recalculated when changing interest rates in countries which trade in currencies is carried out at the broker. What are swap-free accounts? How does their name is associated with a world religion?

In Muslim countries, severely punished by the profit in the form of interest for the provision of money for use, in other words usury. Because of this, brokers was cut off for a huge part of the audience, Islamic accounts were created. Swap them will be charged. Initially the service was only available to citizens of the Muslim faith, but then the company expanded its range to other clients. However, even now there are brokers, providing a service swap free accounts only traders who profess Islam.

Advantages of accounts without swap in sight: the trader does not bear the additional costs, which reduce its profits. Of course, the swap can be positive, but its size is small, in contrast to a negative swap. Islamic accounts – a godsend for long-term traders who keep positions open for several weeks or even months. They will appreciate the traders to trade involving exotic pairs, where swaps can reach impressive sizes.

The disadvantage of swap free accounts is the Commission, the amount of which will be greater than in traditional accounts with a swap. Thus, brokers compensate for losses from the client’s non-standard types of accounts. Swap-free accounts are not suitable for all trading strategies. If the trader adheres to intraday trading, then he does not need to open a trading account with higher commission, but without the swap. For the medium and long term trading tactics suitable swap free accounts.

Swap – an inevitable component of the trade trader, you want to consider when choosing a broker. A few years ago there were some strategies that make a difference only on swaps. At the time, they do not work. Dimensions swaps are small and do not cause inconvenience to the medium-term and intraday traders. Traders who sets long-term deals with a period of one transaction a month is better to stay on swap-free accounts, which will be charged a one-time fee at the time of opening and / or closing orders.

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