Here is a interesting thread on one guys trading methodology. Seems crazy to me but he’s proven profitable.

i have thought about doing this since i read it in the babypips but do you know where to find the countries different interest rates? I thought it was on this sight…but I can’t find

I think I understand this method although perhaps not!?!?. It’s all well and good if the currency turns in your favour after dropping a few hundred pips or more and you make profit at that time, but what if it doesn’t turn and instead it falls and falls and falls? The yen is somewhere around the 235 to a GBP at the moment but it wasn’t so long ago that it was around 190 to the GBP. If it falls back to this level, that’s alot of pips and I’m not sure what you’d do then?? Perhaps I’m misunderstanding this method. Could someone explain in very simple terms please?

I get what the guy is doing. I’m actually thinking about do a bit of research on the subject and seeing what kind of results I can come up with.

I tried this idea using a dummy account on Oanda.How I understand it is you buy a pair that has a high interest rate difference like GDP/JPY or USD/JPY so that while you are holding the positions, you are making high interest on them. But this is suppose to be like added icing to the cake. You then wait until your position is -100 pips or more from your average price, and buy another lot. You cut down the difference of the average price and price by buying the extra lot. You are hedging on the previous lots so when it starts to shift back your way its quicker to break even or profit. You then close once you are above average price. Others explained that they had different methods of taking profits by setting the s/l at breakeven and then letting the profits run, but the originator said that he only checked his trades once a day and if he was positive, no matter what amount he was over he closed his position. And then started all over again. He even stated that one of his positions got as far a -1000 pips but eventually turned his way. He also, I believe, used 1% margin on each trade. Anyways, I tried this and I followed the standard outline of this so everytime it hit -100 from average price I added a lot until there were 3 lots and only checked once or twice a day. At one point checking I was as far away as -120 pips in the hole so I added and the next time I checked I was 55 pips above and closed my position.

i have a question on this- If you hold a pair overnight and you are charged and paid the interest-hopefully in your favor - when do they does this occur?? At 5pm EST or after 24 hours or?? Can someone clarify this?

I use Oanda and they pay interest @ 4pm & whenever a trade is closed

ok, that’s interesting. I didn’t realize that they paid it whenever you closed a position too. I will have to investigate to see if mine does that too.

thx for the feedback

Oanda is, so far as I’m aware, the only broker that handles interest in that fashion - meaning its continuous. You will find that just about everyone else does it at the end of the trading day around 4pm or 5pm Eastern.