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What is it a "Carry Trade".
i tried to get more info over the carry trade but i didn't get the answer how you making profit from this???
over 2 years ago
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To answer your follow-up question, a trader makes a carry trade by going long on the currency that has the higher interest rate. He makes a profit if that currency appreciates versus the one with the lower interest rate. In other words, the price action must move in tandem with the interest rate differential.
For example, the AUDUSD pair is a leading candidate for carry trades because of Australia's large interest rate differential with the US. A trader who is long AUDUSD profits from both the interest rate differential AND the price action if the AUDUSD rises in value.
Check out the BabyPips.com School of Pipsology's discussion on how carry trade works by clicking on the link I provided.
over 2 years ago
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A carry trade is a trading strategy where you sell or borrow money with lower yields to finance and buy those that have higher interest rates. By doing so, you also profit from the interest rate differential of the two assets. For example, the AUDJPY pair is a favorite nowadays for carry trades. As we all know, the yen has an interest rate of 0.10% while Australia has 4.25%. So if you go long on the pair, you effectively profit 4.15%.
over 2 years ago
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Is a trading system where you can make money when the price stays exactly the same for a period of time. You can see more information at the babypips page in the school area.
over 2 years ago
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