**Swap Free** in forex refers to **accounts that do not charge a swap or rollover fee** for holding positions overnight.
**Swap** is the interest rate differential between the two currencies in a currency pair. When you hold a forex position overnight, you either receive or pay swap depending on the direction of the trade and the interest rate differential.
**Swap free accounts:**
* **Eliminate overnight financing costs**, making them attractive for traders who hold positions for extended periods or during weekends.
* **Suitable for traders who follow swing or long-term trading strategies**, as they can hold positions without incurring additional costs.
* **Often offered by Islamic brokers** in compliance with Sharia law, which prohibits the payment of interest.
**Advantages of swap free accounts:**
* Reduced trading costs
* Increased profitability
* Enhanced flexibility in position holding
**Disadvantages of swap free accounts:**
* **Limited leverage:** Swap free accounts may offer lower leverage compared to regular accounts.
* **Hedging fees:** Some swap free brokers charge a fee for hedging positions overnight.
* **Commissions:** Some swap free brokers may charge commissions on trades to offset the cost of providing no swap.
**Note:**
* Swap free accounts do not eliminate all trading costs, as other fees such as spreads and commissions may still apply.
* Traders should carefully review the terms and conditions of swap free accounts before opening one.
* Swap free accounts may not be suitable for traders who frequently trade overnight or who use short-term strategies.