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How To Make A Full-Time Income Trading Less Than Part Time

Big Dogs Exposed

Sound familiar? You have spent years surfing the 'Net, and studying books and charts in search of commodity trading rules, a currency trading strategy, stock market successful trading strategies, or information on how to use commitments of traders data. All you really want is the 'Holy Grail' of entry techniques. You usually end up adding one indicator on top of another, switching from one guru to the next, until you are so confused and unsure of your entry system that you are unable to make entry decisions and stay organized. You get so distracted and frustrated that you quit watching the markets all together!

Shows you how FAST you can make money when the BIG DOGS make their move - by shamelessly copying this winning group . Even I am STILL surprised by how much power they have over ALL markets - not just commodities futures, currencies, and stocks.

Newsletter: Forex Carry Trade

A ‘Yen’ for the ‘Carry Trade’:

The Carry Trade is a popular currency trading strategy used in the forex, in that it guarantees carry traders a return on their medium and longer term positions, if they are handled properly.

In this type of trade, traders buy currencies with high interest rates, and sell those with lower ones. Accordingly, they are assured that the posting of each trading day’s net-positive rollover interest will accrue to their accounts. In this way, the carry traders benefit not only from profit dollars, but also from interest payments, thereby enhancing their returns significantly.

Here is an example of where the carry trade currency trading strategy worked beautifully: The GBP/JPY pair steadily increased 2001 through 2007 due, in part, to carry traders going long to obtain the interest rate differential.

Carry traders who took advantage of the interest rate differential in the GBP/JPY pair made tidy profits by buying the GBP/JPY, and holding on as position trades for lengthy periods of time. They realized their profits in dollars, and from the interest differential between GBP and JPY central bank rates – 5.00% and 0.25% respectfully, at the time of this writing (Sep. 14/07) – a double whammy.

Successful carry traders understand the role interest rates play in the FX market. A country with high interest rates is attractive to carry traders seeking to capitalize on higher returns. As interest rates rise, carry traders jump on board and this, in turn, increases the value of the underlying currency. Carry traders focus mainly on where interest rates are going, hoping to capture a high rate of return. In sum, carry traders buy countries with high interest rates, and short those with lower ones.

The rules of the carry trade currency trading strategy include buying the currency that has a higher interest rate, and selling the currency that has a lower one. As well, carry traders take into account the overall health of each respective country for the currency pair in question to ensure that the market will move to their favor. It follows then that carry traders buy the currency representing a stronger economy, and sell the currency representing a weaker one. Currency pairs that are popular for the carry trade currency trading strategy are: GBP/JPY, GBP/CHF, AUD/JPY, EUR/JPY, CAD/JPY, and USD/JPY.

The Swiss franc is one of the funding currencies used for carry trades and loans. Swiss franc denominated loans are getting quite popular in Europe, as at this writing (Sep. 14/07). The Swissy, in this sense, has a lot in common with the Japanese yen.

Again, as at this writing, there is speculation that the Swiss franc may become the preferred funding currency over the yen, since the volatility of the Swissy is much lower than the yen, which is important for the carry trade to be effective.

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How To Make A Full-Time Income Trading Less Than Part Time

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