Trading Idea: Carry Trading profitable with Oanda

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1

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.

2

Today I shorted 3200 units of EURTRY in Oanda. pip value = $0.25
This should give a return of $1.50 daily. the whole order cost me $176.

3

I don’t understand, is this profitable…
i heard about this but don’t get it…

can you explain or point me to a website

sorry need knowlege

the pearl is in the wriver

4

That is a nice idea, the long time trend is clearly going down :slight_smile:

EURTRK.jpg700×475 67 KB

5

Good! although we can avoid any loss with a flexible money management and lot sizes, it really looks like it’s trending down in the long run.

So we can earn huge interest + pips too.

:slight_smile:

6

Could you please add some more moving averages? It looks a little bare…:cool:

7

EUR/TRY just had a nice spike upwards, i entered and shortened it at top. do you think its a good idea to let the trade run over the weekend? i never did that before. well its a carry trade, i should let it run right?:confused: :confused:

8

Hello,

Certainly, the purpose of carry trading is to leave trade open always. I guess you are with Oanda.

Second thing, start always with very small lot size, because we might need to short as it spikes higher, it’s trading in the lower range right now.

Say you could add to shorts every 500 or 1000 pips according to your choice.

Its range from Mar to Jul is 1.7400 - 1.9000 so we are trading in the lowest area now.

Personally I will add to longs at 1.8000, 8500, 9000, etc.

9

But i dont expect it to go higher any time soon, coz it didnt hit the 2nd Bollinger Band yet. i actually expect it to go further down until a candle hits 2nd bollinger band. maybe i am wrong though
i am waiting for something like the 3 circles in the pic

BB.jpg700×492 75.2 KB

10

I think the technical picture does not matter a lot with me especially with such interest payment. There is no danger, and I am leaving it into weekend.

:slight_smile:

11

Hmmmm. How many times have traders thought that and had danger crop up? :smiley:

Obviously, there’s a huge carry opportunity here, but there are reasons why the Turkish rates are so high. We need to keep that in mind. There are definite political and economic risks. This is a developing economy, not one of the industrailized nations.

12

i just calculated, you need about one full day of interest every 10 pips of loss, so if it goes 100 pips against you, but no more, hold the position for 10 days and you got the money back :slight_smile:

13

Clearly agree with you!
It is developing country, and there is always risk.

I didn’t mean “No danger” that way, ofcourse there is, but not at this moment or time.

All we can do, just watch Turkey economics closely and get out If any trouble occured.

–

Nice calculation, however 100 pips is not that big move for the pair. I will try to merge analysis with interest-taking but I cant find it in MT4 currencies, any suggestions how to find a MT chart for this pair?

Thanks!

14

I let it run over the weekend, not only did it gain interests, i also am 240pips (now @ 259) ahead now!!
topchess, thanks alot, without you mentioning EUR/TRY i wouldnt have gotten into this thing :slight_smile:

but i expect it to reverse soon, it hit the 2nd bollinger band :frowning: aah…too bad things can’t run like this forever :stuck_out_tongue:

240+pips.jpg700×475 72.8 KB

15

When the profit is reasonable, take it. and sell another rally.
:slight_smile:

16

Its way over 1.8-1.9 now. Are you guys still carrying this pair?

17

If anyone still here how do you calcuate the interest rate you get back each day?