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You held a position overnight, and this morning your account shows a deduction labelled only "swap". No explanation of what it is, how the number was worked out, or why Wednesday's charge was three times the size of Tuesday's. This article settles all of it: what swap is, how the formula works step by step, where to check the rate on MT4 and MT5, why Wednesday charges triple, and how to keep the cost under control. Swap, also called overnight interest, is the charge or credit produced when a position stays open past the daily rollover, driven by the interest-rate gap between the two currencies and the direction of your trade. The calculation is swap rate × lot size × number of nights, and the rate is published in your platform's contract specification. Wednesday collects three nights at once to cover the weekend's settlement days. The cleanest way to see all of this in action is to hold a small position overnight on a demo account and watch the swap column update. See it for yourself on a demo account: A swap fee is the overnight charge applied when a forex position is held across the daily settlement time, and it arises from the interest-rate difference between the two currencies in the pair. It can be money taken out of your account or money paid into it, depending on which currency carries the higher rate and which side of the pair you are holding. On most platforms the same mechanism also goes by the name rollover. Rollover is the daily process of extending an open position to the next trading day instead of settling it. The swap fee is the interest adjustment booked at that moment, which is why the two words often appear interchangeably. The fee exists because every currency carries an interest rate. Buying EUR/USD means holding euros, which earn the euro rate, while effectively borrowing dollars, which cost the dollar rate. Your broker settles the difference between those two rates into your account every night the position stays open. Nothing about it is a penalty; it is the financing cost of holding leveraged currency exposure past the settlement point. One boundary is worth drawing early, because two different products share the word. The swap fee retail traders talk about is the overnight holding charge described above. An FX swap in institutional markets is something else entirely: a contract in which two parties exchange currencies on a spot date and reverse the exchange on a forward date, both legs agreed together. Anyone searching "swap fee" wants the first meaning; this article covers it. The table below draws the line. Swap is priced by direction, so your platform quotes two separate rate fields for every instrument, and a third account type removes the charge altogether. Here is what each one means in practice, followed by a summary table. Swap long is the rate applied to buy positions held overnight, and it is the exact field name you will find in the platform's contract specification. Whether the value is positive or negative follows the rate gap: buy the higher-yielding currency of the pair and the field tends to be positive, buy the lower-yielding one and it tends to be negative. I read this field before any trade I expect to hold more than a day or two. Swap short is the mirror field for sell positions, with one catch: it is not actually a mirror. On the same instrument, swap long and swap short rarely sum to zero, because the broker's pricing adjustment sits on top of the raw rate differential. It is entirely normal to see a pair where the long side earns 4.20 units a night while the short side pays 6.80, and the asymmetry is part of the cost of trading, not an error. A swap-free account, often called an Islamic account, removes overnight interest entirely so that traders whose faith prohibits interest can hold positions past rollover. The concept is simple, the fine print less so: brokers typically substitute a fixed administration fee, cap how many nights a position can be held, or both. If the interest question matters to you, the honest move is to read the broker's alternative charging model before opening the account, since "swap-free" almost never means "cost-free". Each currency in a pair carries its own interest rate, so holding the pair means collecting one side while paying the other. When the gap runs in your favour, swap is credited at the daily settlement time; when it runs against you, it is charged. The platform books the amount automatically at its server's settlement hour and you will see it as a separate line on the position, whether or not you traded that day. A quick directional sketch: if the Australian dollar yields more than the Japanese yen, holding a long AUD/JPY position can earn a nightly credit, while holding the same pair short pays a nightly charge. The two amounts will not be equal, because the broker's pricing adjustment is baked into both rates. Same pair, opposite outcomes, decided purely by direction. Read more：What is a currency pair? Definition, types and examples for beginners One formula covers the whole job: Swap = swap rate × lot size × number of nights The swap rate comes straight from the platform's contract specification, in the swap long and swap short rows. In the background, that rate is the two currencies' interest-rate gap with the broker's adjustment applied, but you never need to rebuild it from central-bank figures; the specification value is the one your account will actually be charged. The only wrinkle is units. The specification usually quotes the rate in points, so there is one conversion step before you get a money amount. Worked through with illustrative numbers: Verification: −$6.20 a night for 3 nights is −$18.60. The figure the platform books should land on the same number, and the first night I hold any new instrument, I still check that it does. Read more：What is a pip in forex trading? How to calculate and use it A swap rate is not a single number handed down from anywhere; it is several elements stacked together. The stack also moves. Rates change when central banks hike or cut, on dates published well in advance in calendars such as the Federal Reserve's FOMC schedule, when market liquidity shifts, and when the broker updates its own pricing, so a position earning positive swap today can be paying negative swap a few months later. The practical rule that follows: never trust a remembered rate or a rate table from an article, including this one. The number that counts is the one in your own platform's specification right now, and if you hold positions for weeks, put a periodic recheck in your routine. Two scenarios, same instrument, same lot size, same rate set, so the only variable is direction. All figures are illustrative. Assume AUD/JPY trades at 97.40, with the specification showing swap long +$4.20 and swap short −$6.80 per standard lot per night. Scenario 1: long AUD/JPY. You buy 1 lot on Monday and close on Friday, which holds the position over four nights: Monday, Tuesday, Wednesday and Thursday. Wednesday books three nights, so the charged units are 1 + 1 + 3 + 1 = 6. Swap credit = 6 × $4.20 = +$25.20. By Friday the position's swap column shows +25.20, added to whatever the price itself did. Scenario 2: short AUD/JPY. Same week, same lot, but you sell instead. Charged units are again 6, at the short rate: 6 × $6.80 = $40.80 taken from the account. Even if price ends the week exactly where it started, the account is down $40.80 on financing alone. The gap between the two endings is worth staring at for a second: $66 of difference across one week, produced entirely by direction. Before a multi-week hold, that asymmetry belongs in the plan, next to the stop and the target. Treat the swap on a position as something with a life cycle, managed at four points: Since "check the swap" became a fixed line on my pre-trade checklist, holding costs have stopped producing surprises. That is the entire ambition of this section. Swap lives in two places on the platform: the rate you check before opening a trade, and the booked amount you watch while holding one. MT4 and MT5 use nearly identical paths and the same field names, so the steps below cover both. One reminder before you close the window: the values are quoted in points per lot per night, not money. To turn them into a currency amount, run them through the conversion covered in the calculation section above. Once a position has crossed at least one settlement, open the Toolbox (Terminal in MT4) and look at the Trade tab. Every open position row carries a swap column showing the overnight interest accumulated so far, updated after each rollover. It is listed separately from floating profit and loss, which is exactly why an account balance can drift on a day you placed no trades. Most forex instruments charge three nights of swap at Wednesday's rollover. The reason is settlement mechanics: spot forex settles T+2, two business days after the trade. A position held over Wednesday night rolls to a settlement date that lands on the weekend, when no settlement runs, so Saturday's and Sunday's interest is collected in advance in one Wednesday booking. The weekly rhythm looks like this: Two flags to keep in mind. First, the triple day is not universal: some instrument classes book their triple on a different weekday, so check the swap rollover field in your own platform's specification rather than assuming Wednesday. Second, the weekend itself is never charged again; the triple already covers it, which is why Friday night books a single night. The first Wednesday triple on a statement tends to look like an error, and that is exactly how it read to me: a charge three times the size of the previous night's, with no trade to explain it. Ever since, any position I plan to hold past Wednesday gets its triple-day cost counted before the week starts, not discovered after. The management question is really a risk question, so here are the five swap risks that actually cost money, each with its handling. Read more：What Is Spread in Forex? Formula, Calculation & Examples The honest summary: swap risk can be managed, not wished away. Engineering your trading to zero swap usually means giving up the holding periods your strategy needs, which costs more than the financing ever did. A swap fee, or overnight fee, is the interest charged or credited when a trading position stays open past the daily rollover time, and it reflects the interest-rate difference between the two currencies in the pair. Your platform shows it as two fields, swap long and swap short, and the actual values for any instrument live in its contract specification. Closing every position before your platform's rollover time avoids swap entirely, which is why day traders and scalpers rarely pay it. The other routes are choosing instruments and directions with friendlier rates, or using a swap-free account where eligible. Avoiding swap completely usually costs the strategy itself, so most overnight traders manage the fee rather than eliminate it. Two culprits cover most cases. Either you are holding the expensive side of the pair, since long and short rates differ and one direction often pays several times the other, or you held over the triple-swap day, when three nights are booked at once. Check the instrument's swap long and swap short values before opening, and note which weekday its triple falls on. Yes. Any position still open when your platform's server crosses its rollover time is booked one night of swap, every trading day. Weekends are not charged separately; their interest is collected in advance through the midweek triple booking. No separate settlement runs on Saturday or Sunday. The weekend's interest is collected in advance through Wednesday's triple swap, so holding a position over Friday night books a single night, the same as Monday or Tuesday. Yes, when your position sits on the right side of a positive rate differential, swap arrives as a nightly credit. The differential is usually far smaller than ordinary price movement, though, so treat positive swap as a discount on a trade you already wanted rather than an income strategy. Most Islamic scholars consider forex trading permissible when it is done through a swap-free (Islamic) account, where no overnight interest changes hands. Swap on a regular account is interest-like in nature, so traders for whom this matters should choose a swap-free account and confirm how the broker charges instead. Swap is the overnight interest on a held position: the rate gap between two currencies, adjusted by your broker, booked nightly as swap rate × lot size × number of nights. It triples once a week to cover weekend settlement, and both the rate and the running total are visible on the platform, in the contract specification and the position's swap column. None of it is random, and all of it is checkable in under a minute on MT4 or MT5. The yardstick to carry out of this article: before opening any position you intend to hold, read the instrument's swap long and swap short values and multiply your planned nights into the cost. Once I started treating swap as a line item in the trade plan rather than a surprise on the statement, my holding decisions changed shape: some trades shortened, a few flipped direction, and none of them has ambushed me on a Thursday morning since. The RADEX MARKETS editorial team consists of seasoned financial professionals and market observers. Dedicated to delivering objective market summaries, macroeconomic insights, and educational content, the team strives to keep traders well-informed in a fast-paced financial environment. Reviewed by RADEX MARKETS Risk Warning Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment. Related concepts:

A forex chart shows how the price of a currency pair changes over time. Learning how to read forex charts is one of the first core trading skills because a chart tells you where the price has been, what it is doing now and which way the market may be leaning. Opening a trading platform for the first time can feel rather daunting. The screen is full of red and green candles jumping about, while experienced traders appear to recognise the trend at a glance. Meanwhile, you may still be wondering what the lines, numbers and timeframes actually mean. This guide is written for precisely that moment. We will explain what a forex chart is and how to read candlestick, bar, line, Heikin-Ashi and mountain charts. You will also learn how to interpret common candle signals, read charts on MT4 and MT5, choose an appropriate timeframe and avoid the mistakes beginners make most often. The aim is not to turn a chart into a crystal ball, sadly, trading platforms still lack that particular button, but I am working on it! It is to help you read price action clearly and make better-informed trading decisions. Reading a forex chart means identifying the currency pair and axes, understanding each candle's open, high, low and close, and then judging the overall trend from left to right. The vertical axis shows price, the horizontal axis shows time, and the far-right edge represents the most recent market activity. To start your trading journey, open up a trading account with Radex Markets, one of the industry's most trusted Forex brokers. A forex chart is a graphical record of how a currency pair's price has changed over a selected period. The vertical axis displays the exchange rate, the horizontal axis represents time, and the far-right edge shows the latest available price. For example, if GBP/USD is trading at 1.3250, it means one British pound buys 1.3250 US dollars. When the chart rises, the pound is generally strengthening against the dollar; when it falls, the pound is weakening against it. Read more: What is a currency pair? Definition, types and examples for beginners Forex charts can be displayed in several common formats, with each one presenting a different amount of price information. The next section explains how to read the five main chart types and choose the most suitable view. The five main types of forex charts are: Each chart presents price movement differently. Candlestick and bar charts show all four prices for each period, open, high, low and close, while line and mountain charts usually display closing prices only. Heikin-Ashi charts use averaged values to produce a smoother picture of the trend. For most traders, the candlestick chart is the best place to start because it displays the full price range in an easy-to-read format. The following sections explain how each chart works, beginning with candlesticks in greater detail. A candlestick chart shows four prices for every selected period: the open, high, low and close. If you are viewing a daily chart, each candle represents one trading day; on a one-hour chart, each candle represents one hour. The candle's body covers the distance between its opening and closing prices. The thin lines above and below the body are called wicks, showing where the price travelled during the period before pulling back. On 6 August 2026, GBP/USD opened at 1.3468, reached a high of 1.3480, fell to 1.3447 and closed at 1.3455. This produced a bearish body of 13 pips, an upper wick of 12 pips and a lower wick of 8 pips. The figures are based on WSJ historical GBP/USD prices. This candle tells a short story. Buyers initially pushed GBP/USD higher, but sellers took control and forced the price below its opening level. The lower wick shows that buyers responded near the day's low, although not strongly enough to recover the full decline. Daily candle values can vary slightly between platforms because brokers use different server times and price feeds. The reading method, however, remains the same. Once you can read one candle as a brief contest between buyers and sellers, a complete chart becomes a sequence of those stories. For this reason, the rest of this guide will use candlestick charts as its main format. A bar chart carries exactly the same price information as a candlestick chart: the high, low, open and close. The difference is simply how those four prices are displayed. Each vertical bar stretches from the period's lowest price to its highest. A small horizontal notch on the left marks the opening price, while a notch on the right marks the closing price. If the right notch is above the left notch, the price closed higher than it opened. If it is below the left notch, the price closed lower. Bar charts suit traders who prefer an uncluttered, largely uncoloured view and want to concentrate on price structure rather than candle bodies. They provide the same essential facts as candlesticks, although many beginners find them slightly less intuitive at first glance. A line chart joins the closing price of each period to create one continuous line. It provides the cleanest view of market direction because it removes much of the short-term visual noise found on candlestick and bar charts. The trade-off is that each period's open, high and low remain invisible. A line chart may show that GBP/USD closed higher during the day, for example, but it will not reveal how far the price rose or fell before reaching that close. Line charts are useful when you want to step back and judge the longer-term direction without becoming distracted by every intraday fluctuation. However, candlestick charts are generally more suitable for detailed price analysis and trade timing. Heikin-Ashi is an averaged variation of the traditional candlestick chart. Rather than displaying each period's exact opening and closing prices, its candles are calculated using data from the previous candle and average values from the current period. This smoothing reduces some market noise and creates more consistent candle colouring during established trends. A sequence of similarly coloured candles with relatively small opposing wicks can therefore make trend continuation easier to recognise. The price of that smoother view is reduced precision. Heikin-Ashi values are calculated rather than actual traded prices, so they should not be used to set exact entries, exits or stop-loss levels. This chart type is better used to confirm trend direction alongside a standard price chart. Read more: What is a stop-loss order and how to set it A mountain chart is a line chart with the area beneath the price line filled with colour or shading. It normally connects each period's closing price, so it carries the same basic information as a standard line chart. This format makes the overall rise and fall of a currency pair easy to see, which is why mountain charts commonly appear in market presentations, news reports and simple performance summaries. However, the shaded area provides no additional analytical information. It is useful to recognise what a mountain chart shows, but detailed forex analysis is better left to candlestick charts. The shape of a single candle can provide a useful signal about the contest between buyers and sellers. These four candle shapes are among the most common, although their meaning depends on the trend and the price level at which they appear. A long bullish body with short wicks might appear after price breaks above resistance, showing that buyers controlled most of the period. A long bearish body below support suggests the opposite, with sellers applying consistent pressure. A long upper wick with a small body can form when price tests resistance but fails to remain there. It shows rejection of higher prices, although the next candle should confirm whether sellers are genuinely taking control. A long lower wick with a small body may appear when price drops into support and then recovers. This tells you that sellers drove the market lower, but buyers responded before the period closed. A doji forms when the opening and closing prices are nearly identical. It reflects hesitation rather than an automatic reversal, particularly when it appears in the middle of an ordinary price range. The location matters as much as the shape. A rejection candle at a well-established support or resistance level carries more meaning than the same candle floating in the middle of nowhere. Named multi-candle formations are a separate subject covered in the dedicated chart-pattern guide. A clean chart is usually easier to read than one covered in indicators, labels and lines. Start with price, structure and the most important levels; additional tools can always be added when they serve a clear purpose. Personally, I like to trade with a clean and simple chart set-up; it makes life a lot easier and easier to focus on where to enter and exit a trade. Read more: The best forex indicators every trader should use in 2026 Choosing the right forex timeframe is easier when you use two charts together: a larger timeframe to establish the trend and a smaller timeframe to time an entry or exit. A useful guideline is a ratio of roughly 1:4 to 1:6 between the trigger chart and the trend chart. For example, if you use the four-hour chart to identify a possible entry, check the daily chart first to understand the broader direction. This helps prevent a small pullback from being mistaken for a complete market reversal. A day trader might use the one-hour chart to identify the day's direction before moving to the 15-minute chart for a more precise entry. Looking only at a very small timeframe can make ordinary market noise appear far more important than it is. A swing trader can use the daily chart to identify the main trend, support and resistance, then look for a suitable trigger on the four-hour chart. This combination provides useful detail without encouraging constant screen-watching. A position trader may study the weekly chart for the long-term structure and use the daily chart to plan entries and risk levels. Short-lived intraday movements are generally less relevant to a position intended to remain open for weeks or months. The larger chart provides context; the smaller chart provides timing. Using both gives each candle and signal a clearer place within the wider market structure. Read more: Forex Technical Analysis: A Step-by-Step Beginner's Guide I recently learned the importance of checking the larger timeframe through a losing GBP/USD trade. The 15-minute chart appeared to show a bullish reversal, so I bought at 1.2580 while the four-hour chart remained firmly bearish. The price briefly moved in my favour before the wider downtrend resumed and hit my stop at 1.2542. That was a 38-pip loss. At £10 per pip, the trade cost me £380, and the larger chart had been warning me from the beginning. The problem was not that the small-timeframe signal was invisible; it was that I had read it without its proper context. It is an easy mistake to make. One thing in trading is that no matter how long you have been trading the market will always happily teach you a lesson. Common chart-reading mistakes include: Read more: 10 Forex risk management tips every trader should know Chart reading is a foundation skill, not a crystal ball. Its purpose is to organise price information, identify stronger trading scenarios and help you manage uncertainty, not remove that uncertainty altogether. Reading forex charts begins with identifying the currency pair, timeframe, price axis and time axis. Read each candle's open, high, low and close, then follow the chart from left to right to identify whether price is generally rising, falling or moving sideways. Start with a single candle, then examine how it fits into the broader sequence of highs and lows. A bullish candle closes above its opening price, while a bearish candle closes below it, but either signal becomes more meaningful when viewed within the trend and near support or resistance. Forex trading is primarily a skill, although luck can influence the result of any individual trade. Longer-term performance depends more heavily on analysing probabilities, controlling risk and following a consistent process than on correctly guessing every market move. AI can scan charts, identify recurring patterns and organise large amounts of market data. However, interpreting the wider context, judging the reliability of a signal and accepting the financial risk of a decision remain the trader's responsibility. Candlestick charts are the default choice for most forex traders because they display the open, high, low and close in an easy-to-read format. Line charts can be useful when you simply want a cleaner view of the longer-term direction. No. Candles, trend structure, support and resistance can provide a complete basic reading of price action. Indicators are an optional supporting layer and should clarify what you see rather than cover the chart in colourful confusion. Swing traders commonly use the daily chart to identify the main trend and the four-hour chart to time entries and exits. A two-hour chart may provide additional detail, but the daily chart should continue to supply the broader context. Learning how to read forex charts begins with understanding one candle before attempting to interpret the entire market. Each candle records the open, high, low and close, giving you a short account of how buyers and sellers behaved during that period. From there, read the chart from left to right and examine the structure of its highs and lows. Rising highs and lows usually indicate an uptrend, falling highs and lows suggest a downtrend, and an inconsistent structure may signal a ranging market. Finally, place every candle signal within its proper timeframe and price level. A bullish candle on a 15-minute chart means far less if it forms directly beneath resistance or against a strong daily downtrend. Chart reading cannot tell you with certainty what the market will do next. It helps you interpret existing price action and assess the probabilities more clearly. The next step is to open a real chart on a demo account, practise identifying its candles, trends and support and resistance levels, and build experience without risking real money. Lee W. is a seasoned professional trader with over 10 years of experience. Passionate about sharing valuable expertise and unique market insights, Lee W. now serves as an external and independent market analyst for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment. Related concepts:

On Tuesday, for the second time this month, Bitcoin dipped below $63,000 per coin. It may not seem like an important price marker, but it represents a 50% drawdown from last October’s record high of $126,000 and is therefore psychologically important for many market participants. It goes without saying that the price action in cryptocurrencies has been abysmal in recent months. Many projects are now flirting with prices last visited years ago, ranges that many traders had thought they had long since left behind. Unless Bitcoin undergoes a massive rally over the next few days, it will close in the red for a fifth consecutive month. It has not done this since the 2018 bear market, which saw a total drawdown of 85%. At the time, crypto was reeling from the collapse of the initial coin offering boom, which imploded in spectacular fashion after the ICO bubble popped. The current collapse does not have a prevailing narrative behind it because the underlying cause is structural in nature. To put it bluntly, too many people lost too much money back in October. The 10/10 crash wiped out large swathes of the trading population, from small retail to advanced traders to market makers. No one was spared; the lack of liquidity is still being felt to this day. There is very little going on this week with regard to scheduled events. The economic calendar is dry as a bone, the only exception being US PPI figures on Friday. The main event of the week is Nvidia (NVDA) Q4 earnings report, which is set for publication after the closing bell later today. Despite all the panic surrounding tariffs and Iran, stock markets have been relatively muted so far this week. The AI scare trade has emerged once again however, this time marking International Business Machines (IBM) as its target. IBM plummeted 13% on Monday, its worst stock performance in 25 years, following claims from AI startup Anthropic, who said that its Claude Code tool could help modernise the COBOL programming language. COBOL is often cited as an antiquated language with which fewer and fewer programmers are familiar, but one that remains crucial to IBM infrastructure. Whether or not the tool can actually disrupt the status quo is irrelevant; the AI scare trade remains a powerful narrative, at least for the time being. #BTC #IBM #NVDA

According to the Chinese Lunar calendar, the 17th of February 2026 marked the start of the year of the horse. Traders searching for an edge may ask themselves what this could possibly mean for financial markets, after all, as a certain Mr. John Pierpont Morgan once said: “millionaires don’t use astrology, billionaires do”. Strong words, and while there is no historical evidence of the famous financier ever uttering such a phrase, it goes without saying that investors can be a very superstitious bunch. The year of the horse comes around every twelve years, so there should be enough data points to establish at least a partial picture. So how does our four-legged friend measure up to the rest of the roster? Lunar performance of the S&P 500 A fast, but skittish and fickle animal, the horse is hardly the kind of beast investors would want to represent their portfolios, but let us not be too hasty. How have markets fared during previous years of the horse? Using the S&P 500 as a benchmark, we can run the numbers for every lunar year dating back to the late 1920s, which is when Standard & Poor’s began publishing daily index data. The 23rd of January 1928 ushered in the year of the dragon, which would last until the 9th of February 1929, and so on and so forth, lunar year by lunar year until 16th of February 2026, which concluded the year of the snake. We can calculate the annual return for each period, and then average the results across each animal, as displayed below: As per the above chart, at 6.2% the horse is a relatively safe bet, firmly in the middle of the pack. Reliable, but nothing exceptional. The clear winner is the pig, providing an average return of over 15%. The next year of the pig will come around in 2031, so mark your calendars for that. The clear loser is the snake, which is the only animal to yield an average negative return at -1%. Had it not been for the impressive surge in stocks last year, the year of the snake would look even worse. Of course, even with a century of data, each animal has only 8 or 9 data points with which to pad their resumé, so outlying years will heavily skew the results. In fact, the first year of the horse for which we have records, starting on the 30th of January 1930, would experience much of the fallout from the great Wall Street crash of 1929, resulting in a 22% loss for the S&P 500 during that period. 2002 would be another rough year, with the horse bearing the brunt of the dot-com bubble burst, Enron fraud and September 11th attacks, during which the SPX would shed 23%. In contrast, our noble stead would also witness some of the strongest bull markets in history, such as the peacetime boom of 1954, which would yield a massive 37% return. Quantifying volatility The year of the horse seems to go from one extreme to the other, covering some of the most volatile periods in financial markets. Not only that, but such years typically exhibit large price ranges as well as far greater volatility than average. In fitting with their nature, horse years have historically offered plenty of action to traders. By crunching the numbers, we can in fact quantify this phenomenon. If we take the tops and bottoms for each given period and divide by the mean, we obtain a measure of the spread in prices for each lunar year. Sure enough, by this metric, the horse is a wild beast indeed, offering large trading ranges over the course of its reign. Only the tiger provides a wider playing field. Trading ranges are one element, but we can go deeper. To properly understand the trading conditions of a particular period, we need to quantify the market volatility during such times. To do this, we calculate the standard deviation (σ) of daily closing prices across each lunar cycle. This tells us how spread out the different prices are within the range itself. Essentially, this is a measure of how chaotic each year has been. After calculating the standard deviation (σ) for each year, we then divide by the mean (μ) of that period, thereby normalising results and accounting for the huge growth observed in the S&P 500 index over the past century. This gives us the coefficient of variation, a quantifiable measure of the trading volatility within each given year. Finally, we average the coefficient of variation for each Chinese zodiac animal, expressed as a percentage, summarised below: Several observations. Firstly, the horse is a consistently volatile year, beaten only by the ox. Secondly, there does not appear to be a clear relationship between performance and volatility, which is an interesting result in and of itself. Thirdly, with a low of 5.1% and a high of 8.3%, the spread between coefficients is meaningfully large. Our current data set is far from ideal. To obtain a statistically significant result, we would need to roughly double our sample size, which we cannot do without waiting around for another century. The above results are in fact solid enough to suggest a trend, but not robust enough to demonstrate one. Lunar performance of the Nikkei 225 Of course, the S&P 500 is only one index, for one stock market, in one country. Hard to establish global trends with such a limited data set. How do other markets fare according to the Chinese Lunar calendar? Unfortunately, this is where we rapidly encounter a problem. For most markets, the data simply do not exist over a meaningful time frame. Given the twelve-year cycle, a couple of decades of price information is just not enough. We can look up the daily close for the S&P 500 all the way back to 1928 without issue, but the same cannot be said for much else. We do have one overlooked exception however: the Japanese Nikkei 225, for which we have daily records stretching back to 1949. Repeating the same steps as above, we obtain the average results for each Chinese zodiac animal: The first point to note is the wider spread of average returns compared to the S&P 500. The dragon, rat and rabbit can all boast average returns of over 20%, while the horse, sheep, dog, ox and tiger all fail to offer more than 5%. The second point of interest is the fact that our poor horse ranks rock bottom in terms of average returns. If previous results are anything to go by, investors would do well to get out of Japanese stocks as soon as possible. As with the S&P 500, we can also calculate the volatility for each period, using the same methodology as above: Once again, several observations. Firstly, the horse may be on the higher side, but this time is no longer an outlier. The dragon and snake are both more volatile, while the rat is in a league of its own. Secondly, unlike the S&P 500, there does appear to be a link between performance and volatility within the Japanese index. Thirdly, with a low of 5.3% and a high of 12.2%, this time the spread between coefficients is in fact statistically significant. Interestingly, this suggests that changes in performance in the Nikkei 225 across lunar years are not random. Of course, this time around the sample size is even smaller than it was for the S&P 500, making the results extra sensitive to outliers. Nevertheless, a pattern has cautiously presented itself. Final thoughts Analysing the S&P 500 and Nikkei 225 indices according to Chinese lunar cycles reveals some interesting bits of information. The Japanese stock market appears to be more heavily tied to the lunar calendar than its American counterpart, with the dragon, rat and pig being particularly beneficial years. There is a possible explanation to this in how the two financial markets have historically performed. US markets have typically followed shorter, more frequent credit cycles, thereby smoothing over the results. On the other hand, the Japanese economy has followed much more prolonged boom and bust cycles, often lasting decades, with which the lunar cycle has happened to coincide. Either way, if historical patterns are anything to go by, US markets are set for a volatile year. Turning to Benjamin Franklin this time: “by failing to prepare, you are preparing to fail”. Buckle up. → Read the annexe

I’ve been trading for 15 years now, so I guess you could call me an old sweat - the kind of trader who has seen more ups and downs in the markets than most people have had hot dinners. I’ve watched trends come, go, come back again, disappear completely, and then show up five years later pretending they were never really gone. At some point in every new forex trader’s journey, they stumble across the magical term Expert Advisor, or as the cool kids call it, an EA. In simple terms, an EA is a little automated program that trades your account for you. No clicking, no overthinking, no panicking when your trade goes 20 pips against you, the robot does the heavy lifting while you sit back and watch the dollar’s drop into your account. For many beginners, this sounds like the ultimate shortcut. No need to learn charts. No need to understand risk. No need to wonder where the market is going, because your shiny new robot “knows things.” Amazing, right? Well… brace yourself, because I’m about to burst a few hopeful trading bubbles. Most EAs don’t work. There, I said it. Now let’s get into the fun part, why this is the case. Let’s be honest: the moment humans discovered that a robot could potentially make money for them while they slept, ate, watched the Disney channel, or pretended to “work from home,” EAs were always going to explode in popularity. Forex attracts a certain type of person, the dreamer, the hustler, the “I’m one good trade away from quitting my job” optimist. So, when a shiny little software program promises to do all the hard thinking, remove emotions, and generate consistent profits… well, that’s like handing candy to a toddler. They’re taking it, no questions asked. EAs became popular for a few simple reasons: So yes, the popularity makes sense. But now that we’ve praised them, let’s take a look at what they actually do well, because although many disappoint, not all EAs are entirely useless. Let’s give EAs the credit they deserve. While many fall short of their heroic marketing promises, they do offer some genuine advantages. In fact, there are areas where robots outperform humans by a mile, mainly because humans are emotional, impatient, overly optimistic, under-caffeinated, and occasionally just downright chaotic. Here are the key benefits: So yes, EAs do have some solid advantages. But (and it’s a big but) …For every trader who uses an EA successfully, there are thousands watching their account blow faster than you can say “Martingale.” Which brings us to the fun part. (a.k.a. The Part Nobody Mentions on the Sales Page) * EAs sound incredible on paper, like a magical money-printing elf that never sleeps and never complains. But in reality, many of them behave more like a toddler with scissors: unpredictable, dangerous, and absolutely guaranteed to cause chaos when left unsupervised. Let’s break down the real-world downsides. So yes , EAs have disadvantages. Quite a few. But the biggest question is the one most traders ask: “Why do so many EAs fail?” And oh boy… there’s a whole section for that. Most EAs don’t work. Not because forex is impossible. Not because robots are stupid. Not because the universe hates your trading dreams. They fail for a much simpler reason: they’re not built for the real market. Let’s break down exactly why. 1. They Are Over-Optimised to Look Good (But Only in the Past) EA developers love to “curve-fit” strategies. This means: …until the backtest looks flawless. This creates an EA that performs beautifully on historical data and catastrophically on real data. It’s like training for a marathon on a treadmill and then wondering why you collapse on an actual road. 2. They Can’t Handle News Events Most EAs fall apart during: Unless specifically coded to avoid high-impact events, and most aren’t, they will happily open a trade two seconds before Jerome Powell speaks and then blow your account with pride. 3. They Don’t Adapt to Volatility Changes Volatility is not constant. Ranges expand and contract. Markets trend, then consolidate, then reverse. Most EAs use fixed parameters like: That might work on Monday an absolutely destroy the account by Friday. 4. They Fail in Unfamiliar Market Conditions If the EA was built in a trending year, it usually dies in a ranging year. If it was built in a quiet market, it usually dies in a volatile one. If it was built in 2020… well, nothing worked properly in 2020. Robots don’t do improvisation. 5. Most EAs Don’t Understand Price Action They follow signals. Not structure. Not liquidity. Not manipulation. Not market psychology. If you’ve ever watched an EA blindly buy into resistance or sell into demand, you’ve probably felt the urge to unplug your entire computer and start a new life. 6. They Often Use Dangerous Money Management The biggest offender: Martingale. “Double the lot size every time you lose,” they say.“ What could possibly go wrong?” they say. Everything. Everything can go wrong. And it usually does. Grid systems are no better; they work beautifully until they don’t… and then it's account-wipe-out time. 7. They’re Built by People Who Want to Sell the EA, Not Use It Ask yourself this: If you created a robot that could generate 200% profit a year with minimal drawdown…Would you sell it for £49 online? Exactly. Most EA sellers don’t use their own robots. They earn money from selling the EA, not from trading it. That alone is a flashing neon sign the size of London saying: “Be careful.” 8. Most Traders Don’t Actually Know How to Use Them Properly Even a decent EA can fail if: A good EA still needs a good human behind it. So yes… most EAs fail. Spectacularly, in some cases. But don’t worry, the article doesn’t end in total doom. Because despite everything, some traders do use EAs successfully, me included! Alright, let’s bring some balance back, not all robots are destined for the scrap heap. Despite the horror stories, blown accounts, and the occasional EA that behaves like a drunk intern randomly pressing buy and sell…there are traders who use EAs profitably. But here’s the twist: They don’t treat EAs like magic money machines. They treat them like tools. Tools that must be tested, supervised, adjusted, and kept on a short leash, much like a teenager with car keys. Let’s walk through what the successful EA traders do differently. 1. They Use EAs to Automate Good Strategies, Not Create Them A good trader develops or understands the underlying strategy first. Then they automate it. If the strategy is solid manually, the robot simply makes it consistent. If the strategy is rubbish manually, the EA just burns through the account faster, with admirable efficiency. 2. They Test EAs in Forward Conditions, Not Just Backtests Successful EA users don’t fall for the shiny backtest graph. They want to know: They run the EA in demo first, then small live accounts, before scaling it. No shortcuts. No blind hope. No dreaming. 3. They Understand the Robot’s Weaknesses Every EA has a weakness. Trend-followers die in ranges. Grid bots die in strong trends. Scalpers die during spreads widening. Profitable EA traders know exactly when to run their EA and when to pause it. They don’t just leave it running 24/5 hoping for the best. 4. They Use Proper Risk Management (Unlike Most EA Sellers) Smart EA traders: In other words, they treat their EA like it actually trades real money (because it does). 5. They Combine Human Analysis with Automation The best results often come from a hybrid approach: Robots aren’t good at thinking. Humans aren’t good at staying consistent. Together? They can work surprisingly well. 6. They Use EAs for Specific Tasks, Not Total Accounts Smart traders don’t give an EA full custody of their account like handing a 5-ear old the family credit card. They use EAs for tasks such as: This controlled approach preserves the trader’s skill and keeps the robot in its lane. 7. They Avoid “Commercial” EAs Most profitable EA traders don’t buy their bots on Telegram, MQL5 , or shady websites promising 400% returns. Instead, they: The real edge isn’t in buying an EA. It’s in understanding how to use one. So yes, while most EAs fail, some traders do use them smartly and successfully. But traders also need to know the warning signs…because for every good EA, there are a hundred disasters waiting to happen. If you’ve ever browsed EA marketplaces, you’ve likely seen promises so ridiculous they make Nigerian prince emails look trustworthy. To protect yourself (and your account), here are the biggest red flags, the signs that an EA is basically a financial hand grenade disguised as a friendly robot. 1. “99% Win Rate!” This is the classic. If an EA has a 99%-win rate, it’s almost always: These systems win tiny trades repeatedly…until that one losing trade wipes out months, or even years, of gains. It’s not a trading strategy; it’s a slow-motion disaster. 2. No Stop-Loss in the Strategy If your EA doesn’t use a stop-loss, congratulations: You’ve just installed a bomb on your trading account. Robots that never accept a loss eventually take one so huge it makes your screen look like a horror film. 3. “Guaranteed Profits” or “Never Loses” If Warren Buffett can’t guarantee profits…If banks can’t guarantee profits…If hedge funds can’t guarantee profits… …but the guy selling you an EA for £79 can? Absolutely not. 4. Backtests Look Too Perfect Smooth equity curve. Tiny drawdown. No losing streaks. Every trade in profit. This means the developer curve-fitted the EA so tightly to past prices that it basically memorised historical data. Put it in a new environment and it panics like a tourist trying to order food in a foreign language. 5. The Equity Curve Goes Straight Up… …but the balance curve is flat. This means the EA is floating massive losing positions but hasn’t closed them yet. It’s the EA version of shoving debt under the carpet. Eventually, you have to open the door, and it won’t be pretty. 6. It Trades 24/5 on Every Pair No sensible EA trades: These “universal EAs” don’t exist. Markets behave differently, EURUSD is not GBPJPY, and USDJPY is not XAUUSD. If the EA claims to master everything, it’s lying. No two trading days are the same and finding an EA that works in all market conditions is like finding the Holy Grail. 7. Little or No Verified Live Results A MyFXBook with: …is as trustworthy as a politician before an election. If there’s no verified live performance on a real account, stay cautious. 8. The Seller Has No Real Trading Background If someone can build a profitable EA, they’re usually: If the seller has nothing but a flashy Instagram full of rented cars and hotel lobbies…Let’s just say it’s not a good sign. 9. It Uses “Secret Algorithms” or “Institution-Grade Logic” Translation: “It’s just a moving average crossover but we gave it a fancy name.” If it’s so secret, why are they selling it? 10. Ridiculously High Monthly Returns Anything promising: …isn’t a trading robot. It’s a countdown timer to account destruction. Professional funds aim for 10–20% per year. And they have teams with PhDs. By now it’s clear that EAs are not magical printing machines created by benevolent forex angels. But they’re also not worthless. Like many tools in trading, they have their place… as long as traders know when and how to use them. So, let’s break it down, nice and simple. When EAs Can Be Useful 1. When You Already Have a Solid Strategy If you have a proven, thoroughly tested approach, an EA can automate it so you avoid: The robot becomes your assistant, not your replacement. 2. When You Need Consistency If you know your biggest weakness is sticking to rules, an EA keeps you disciplined. No more emotional nonsense. No more tinkering mid-trade. No more “let me just move this stop-loss a tiny bit.” 3. When You Want to Remove Busywork EAs are fantastic for boring-but-important tasks like: Basically, all the stuff humans find tedious, robots love. 4. When You Treat Them Like Risky Employees A good EA trader is like a good manager: EAs shouldn’t have full responsibility. Think of them as interns: Helpful, but absolutely not ready for the keys to the company. 1. When You Expect Them to Make You Rich Without Effort If your plan is: …save yourself the pain. It doesn’t work quite like that. 2. When the EA Uses Martingale or Grid Trading It will work beautifully…until the market trends strongly…then your account will explode more violently than popcorn in a microwave. 3. When You Don’t Understand the Strategy Behind It If you can’t explain: …then you shouldn’t let it touch your money. 4. When You Don’t Use Risk Management EAs need: Taking a reckless EA and adding reckless risk is basically setting your trading account on fire. 5. When Market Conditions Change A trending EA fails in ranges. A range EA fails in trends. A scalper fails during volatile spreads. Robots aren’t built to adapt. That’s your job. Expert Advisors are neither heroes nor villains, they’re tools. Useful in the right hands. Dangerous in the wrong ones. If you’re looking for a shortcut to success, an EA won’t save you. If you’re looking to enhance your trading, automate good processes, and remove emotional nonsense, an EA can genuinely help. The key is understanding the strategy, managing the risk, and remembering one universal truth: As we move into the new era of Ai there is no doubt EAs will advance in their ability to make your trading journey more successful. I have seen, and indeed I am testing new EAs myself which have been created by Ai. Let’s just say the future looks bright, but even the best Ai systems are not quite there yet. Big banks and financial institutions are investing large amounts of money into Ai so they must know something we don’t right? If a robot could truly create guaranteed wealth, it wouldn’t be available for purchase, its creator would be on a yacht somewhere, sipping something expensive. Use EAs wisely and keep your expectations realistic. Always remember in trading, there’s no substitute for skill, experience, and a healthy dose of scepticism.

Markets are on edge because of a potential escalation of hostilities in Iran. The United States continued to amass military assets around the Middle East and Europe over the past couple of days, appearing to move into position ahead of a future conflict. Negotiations between the two parties have not broken down by any means, in fact, Oman’s foreign minister confirmed that talks between the US and Iran would go ahead in Geneva on Thursday, but investors are understandably adopting cautious stances going into this week. . Oil markets have been particularly vulnerable to the ebb and flow of geopolitical sentiment, with the most recent developments pushing the Brent Crude benchmark to a six-month high of $71 per barrel last week. The problem is not so much the lack of oil being extracted from Iranian oil fields, but the threat of disruption to oil flows in and out of the Persian Gulf. Predictably, tensions in the region are affecting precious metals, with gold and silver rising confidently in the early hours of this morning. Gold managed to push north of $5,170 per ounce as the week got underway, while silver climbed over $87, maintaining last Friday’s momentum, which saw the white metal surge almost 8%. On the other hand, cryptocurrencies woke up on the wrong side of the bed this morning, with Bitcoin testing lows of $64,000 and dragging everything else down alongside it. Bitcoin is currently in a rough situation after the mining algorithm sharply increased difficulty by 15% last week, which, paired with relatively low prices, has impacted miner profitability. In light of the current dynamic, some miners are having to sell part of their war chest in order to cover operating losses. One miner, Bitdeer Technologies, sold all its remaining Bitcoin last week, amounting to around 940 BTC, leaving the company’s treasury completely empty. Meanwhile, behind the scenes, US banks and crypto companies are finally starting to near some form of agreement, which should, in theory, signal a green light for the long-delayed Clarity Act. #CrudeOil #Bitcoin #PreciousMetals