Forex Carry Trade Outlooks

Forex Carry Trade Outlooks Forex traders that are looking to increase the number of available strategy options should consider some of the approaches that have already been tested …

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Forex Carry Trade Outlooks

Forex traders that are looking to increase the number of available strategy options should consider some of the approaches that have already been tested by the market experts.  This is the surest way of determining whether your own trading strategies are positioned for success or failure, and this is the surest way of determining whether you strategies can lead to sustainable gains in the market.  Here, we will look at the carry trade and its position within the larger methodology of expert market traders.

 

Carry Trading Defined

 

When we are dealing with forex carry trades, we are essentially looking to buy a currency with a high interest rate and then sell that for a currency with a lower interest rate.  The difference here is then captured as profit for as long as the position in open.  In addition to this, currency movements in market valuation will also be something to calculate when determining your overall profit and loss levels.  In this way, we can gauge the success of each trade.

 

When you are looking to start implementing these types of forex trading strategies, you will need an introducing broker like Juno Markets that is able to meet all of your needs as a forex trading client.  Juno Markets is a broker with stellar trading reviews and a long history of efficiency and accuracy in the forex trading markets.

 

Common Currency Choices

 

As far as specific trades are concerned, any currencies can be used as long as they meet the above criteria.  From a more practical standpoint, it can be said that one of the most popular currencies involved is the Japanese Yen.  This is because interest rates in Japan have been near-zero several decades and this makes it much easier to use as a funding currency when dealing with carry trades in assets like the Australian Dollar or the British Pound, for example.

 

So these are some of the issues involved when you are looking to deal with the time-tested strategy of carry trading.  This is a market approach that has been visible in the forex markets for quite some time, so it is clear that there are significant profits to be made when this type of approach is conducted successfully.  Carry trades add the potential for profiting from both interest rate differentials and currency moves, so large opportunities can arise when trending moves are favorable.


 

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