beginner question on settlement days

[letian]

Hello there,

I'm new and haven't traded anything yet. I don't know if someone has asked this question, but I didn't find it in beginner's FAQ section.

It's about the 2-day settlement of FX. What does it mean? locked for 48 hours sharp? Is it possible to buy and sell EUR/USD a couple of times a day? If yes, how does it work / settled? In other words,, how is daytrading possible in FX and equity where your transaction has to be settled in 2 or 3 days?

Thank you very much.

 

[Martinghoul]

No, it just means that the actual payment occurs two days after the trade is made. You can buy/sell EURUSD however many times a day. Why does it matter what your settlement lag is? How does that change the economics of the transaction, you think? How does it change the economics of making several transactions in a single day?

 

[Rhody Trader]

It should be noted that if you're a retail forex trader your broker rolls any position you have open at the end of the trading day over so that you never actually have a settlement. In other words, in retail forex trading you don't actually buy or sell anything.