Trading Idea: Carry Trading profitable with Oanda
Hello traders,
This is not a trading system, but it is a flexible idea which depends on Carry trading with Oanda.
We certainly know that we can earn interest by buying high-yielding currencies vs. low-yielding currencies. Example of this is GBPJPY, USDJPY, AUDJPY, etc.
Oanda features a decent interest-payment pair which is EUR/TRY
We short the EURO and long the Turkish Lira.
This is a simple and profitable idea, think of it...Let us begin
Here is a formula of how you can make profit with simple carry trading the TRY versus EUR.
Short 1300 units in Oanda, pip cost=10cents, margin used=70USD
interest paid daily for this position is $0.60 approx. this is a high return!!
Now what If the pair started to ride against us big time??
Good point. First we have to agree about few things
[1] What goes up, goes down. and there is always a retracement within a trend, or more than one retracement.
[2] from past EURTRY highs we can know it's higher range, lower range. and not panic!
[3] starting very small lots and give room for our position that we never lose our money, even be able to add to our shorts in a smart point.
Say: the pair traded 1000 pips against you.. while you gain 0.60 USD per day.. 1000 is quite high range and would take long time to achieve .
1000 pips x 10cents a pip = 10000cents = $100USD. It does not really affect regular accounts with 5K minimum for example.
We won't just leave it forever, no. We can pick shorting orders from tops or what is called "overbought" areas, picking some retracements after a very strong move can be useful. I tell you it won't shoot up 10,000 PIPs in straight line.
I started this thread and I will put real time data, how I am going to dead with EUR/TRY as an interest backup for my account. This interest can be a Hedge against any occuring losses in the future.
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