Is there a way to trade this strategy when the two currencies cannot be bought or sold as a currency pair by any broker.
Thanks
Yes, find a third currency that has a pairing with both of the currencies you are interested in.
Assuming you want to do XXX/YYY but that pairing does not exist. Find XXX/ZZZ and YYY/ZZZ then buy one and sell the other. If you get XXX/ZZZ and ZZZ/YYY you will have to buy or sell both. Why does this work?
XXX/ZZZ - Buy = Long on XXX and short on ZZZ.
YYY/ZZZ - Sell = Short on YYY and Long on ZZZ
Result = Long on XXX and short on YYY. The ZZZ cancels itself out.
If you had ZZZ/YYY you would have to buy it to get the same result…
ZZZ/YYY - Buy = Short on YYY and Long on ZZZ
I don’t recognise the term “carryback trade”.
“Carry trade” means borrowing money at a low rate of interest and lending it out at a higher rate of interest. In conventional banking this was sometimes jokingly referred to as the 3-6-3 strategy - you borrowed money at 3%, lent it out at 6%and made it to the golf course by 3pm.
It is possible to short forex pairs in the same way but since most forex private retail traders are working very short-term its not highly dependable.