A swap in Forex is an interest rate that traders pay or receive for holding an open position overnight. It arises from the difference in interest rates between the two currencies in a pair. A swap can be positive or negative. A positive swap means that the trader receives money, and a negative swap means that he pays. Therefore, for example, it is important for me not to carry over my trades to the next business day in my intraday trading so as not to incur unnecessary costs in the form of negative swaps. It is more important for me that the spreads are minimal (for example, my broker fxopen has a spread on EURUSD of only 1-2 points), which makes it possible to earn even on small price movements.
A swap is the interest paid or earned for holding a position overnight in forex trading. It affects trading by impacting overall profitability, as traders can incur additional costs or gains based on interest rate differentials. Understanding swaps is crucial for managing long-term positions and overall trading expenses effectively.