Carry Trading Strategy In Forex, More Profitable For Traders.

[jeanpatterson]

Very well explained. Of course every trader needs a proper strategic trading plan to carry out trades and this is the first step of beneficial trading. Those who start trading without any prior knowledge face nothing but losses.

 

[Alexandra Preston]

Carry trading can be profitable provided the trader’s prediction matches, and the interest rate of the quote currency remains viable. Interest rate is one of the biggest factors that can affect carry trading. Carry trading involves the trader investing in a high-yielding currency (the quotation currency, which serves as the pair's benchmark) with funds from a lower-yielding currency (the base currency). Carry trading is lucrative over time as long as the increased interest on the quote currency is not offset by a greater depreciation of the base currency than the interest amount. To execute successful swing trading / carry trade, a thorough understanding of interest rate changes is required, including what can affect what and how predictable the interest rate shift is.

 

[Muricide]

This is such a relevant post. And like OP mentioned it is important to consider the market condition when you think of carry trading. If a beginner is interested in carry trading then they should be willing to stay in the trade as long as possible to make the most out of interest rate differences. It is surely a profitable strategy for someone who is willing to take the risk.

 

[Wrongous]

Honestly, I have never used carry trading but after reading your post, I think I might consider using this strategy.

 

[Isometric]

Thank you for the insightful post about carry trading. Like OP said USD/JPY is one of the most preferred currency pairs for carry trading as they have the largest swap size. I would like to add USD/CHF as well. Also AUD/JPY was considered the best pair for carry trading in the past but now it is ranked last even though many sources still recommend it as the perfect pair for carry trading. That is why we need to choose the currency pair with utmost attention when we decide to engage in carry trading.

 

[Tambour]

Carry trading is a popular strategy in forex trading where traders earn profits by buying currencies with higher interest rates and selling currencies with lower interest rates. The difference in the interest rate is known as the "carry."
Well, Carry trading can be profitable in both rising and falling markets, but it is more profitable in markets where there is little or no volatility. This is because the carry trade depends on the interest rate differential, not on the direction of the market.

 

[Monique Rich]

Carry trading can be helpful for beginners and expert traders as well. Keep sharing. Thanks a lot.

 

[Wavemeter]

Thanks for sharing, really nice article. I have not used this trading strategy but I think I’ll try this on demo.

 

[Comline]

Carry trading is based on the idea that you should borrow one asset to buy another. You will continue to be in a lucrative position as long as the interest rate on an asset you borrow is lower than the interest rate on an asset you purchase. However, the value of either currency could vary and affect your position. Additionally, trading commissions or office overhead could affect your income.