Carry Trade Strategies

As previously mentioned, by using leverage you can hold a much larger position, and subsequently earn more in interest than your actual capital alone would allow. This is why leverage is an integral part of any successful carry trade strategy. Forex brokers typically offer retail traders leverage up to 1:30. By taking full advantage of this, a […]

The premise of carry trading forex is that you not only make money from trading one currency for another, but you also benefit from interest gained on the currency you’re buying. Since this interest is added to your account daily, the longer you can keep your position open, the better. Essentially, this means that a

Opening a carry trade on a currency pair where either currency or both are volatile is a very risky move. Any profit gained in interest could be immediately wiped out by a sudden move in the market and you could well find yourself trading at a substantial loss. Although risk often equals reward in forex

The first port of call when carry trading forex is to identify available currency pairs with a significant difference in interest rates. Typically, these are found in cross-currency pairs; that is, any currency pair not inclusive of the U.S Dollar. However, as always, it’s important to tread carefully here. At the time of writing, there are