Settlement

Settlement is the final step in a forex transaction where the actual exchange of currencies occurs between the buyer and seller. After a trade is agreed, the currencies still need to physically move between accounts, and settlement is the mechanism that completes that transfer.

Standard spot forex trades settle on T+2, meaning two business days after the trade date. For example, a trade executed on a Monday settles on Wednesday. If a position is held past the daily cutoff (typically 5 PM New York time), it rolls to the next settlement date. This rollover triggers swap charges based on the interest rate differential between the two currencies in the pair. Holding a high-yielding currency against a low-yielding one earns positive swap, while the reverse pays negative swap.

For example, a trader holding a long USD/JPY position overnight when US rates are 5.25 percent and Japanese rates are 0.25 percent typically earns positive swap on the rate differential. On a standard lot ($100,000), the daily swap might be around $7 positive. Over a month of holding, that adds roughly $210 to the account on top of any price moves. The reverse position (short USD/JPY) would pay the swap, costing a similar amount daily.

In copy trading, settlement happens automatically through the broker — subscribers never need to handle physical currency delivery. SteadyFlowFX's trades close as cash P&L credited or debited to your account at the moment of closure. Understanding settlement helps new subscribers see that copy trading forex involves no complex logistics: positions open, move, and close as automatic balance changes.