Day trading
What you learn in 3 minutesDay trading means opening and closing a position inside one session, so the position is not held overnight. That matters because a trade closed before the daily cut-off avoids the swap charge that a broker applies to positions carried past it. On EUR/USD, one pip on one standard lot is 10 units of the quote currency, which is then converted into pesos at the current rate. This lesson walks through one full day: entry, holding, and closing before the night rollover.
One day on EUR/USD: entry, hold, close before rollover
| Step | Amount | Note |
|---|---|---|
| Entry price | 1.0850 | The price where the buy order is filled in the morning session. |
| Exit price | 1.0870 | The price where the position is closed the same day, before the rollover cut-off. |
| Distance moved | 20 pips | 1.0870 minus 1.0850 is 0.0020, and 0.0020 divided by 0.0001 is 20 pips. |
| Pip value on one standard lot | 10 units of the quote currency | 100,000 multiplied by 0.0001 equals 10, before conversion into pesos. |
| Gross result before costs | 200 units of the quote currency | 20 pips multiplied by 10 per pip equals 200, before conversion into pesos. |
| Swap for the day | ₱0 | The position is closed before the daily rollover, so no swap is charged for holding it overnight. |
| Costs that still apply | varies by broker | The spread and any commission are charged on entry and exit and are not shown above. |
The broker may round the pip value, quote a different conversion rate for the peso, widen the spread near the session close, and charge a commission on top. The swap is avoided only if the position is genuinely closed before the broker's cut-off, which varies by broker.
The mistake people make here
The common mistake is to hold a day trade past the session close because it is slightly down, hoping it comes back. That turns a planned same-day trade into an overnight position, which can add a swap charge and exposes the account to news that arrives while the market is closed. Decide the exit time before entering, and treat it the same way as the stop. If the position is still open near the cut-off, close it and review the decision afterwards.Check yourself
EUR/USD moves from 1.0850 to 1.0830 on one standard lot. How many pips is that, and what is the gross result before costs?
1.0850 minus 1.0830 is 0.0020, which is 20 pips. At 10 units of the quote currency per pip on one standard lot, 20 multiplied by 10 is 200 units of the quote currency, before conversion into pesos and before any costs.
A day trade is opened at 1.0850 and closed at 1.0870. If the broker charges a spread of 1 pip, what is the net result in pips?
The price moved 20 pips in favour of the position. Subtracting the 1 pip spread leaves 19 pips. At 10 units of the quote currency per pip, that is 190 units of the quote currency before conversion into pesos and before any commission.