Forex Is possible to make a profit from carry trade strategies?

[FXOchartist]

One trading strategy that is quite popular is the carry trade. This strategy seeks to profit from high-interest rates in a currency by borrowing in a low interest rate currency. In essence, carry trades benefit from positive swaps on the difference in interest rates on currency pairs in the right trading position.

In essence, Carry Trade is a way of forex trading that prioritizes profits from interest rate differences between the currency pairs being traded, not profits from changes in exchange rates between the currencies themselves. Carry-Traders can suffer losses if the value of the currency borrowed to finance the Carry Trade strengthens, or the target currency weakens, and it could be a combination of both

For example, investors borrow Japanese Yen which typically has a low interest rate, then invest in Australian Dollars which typically have a high interest rate. If the currency exchange rate does not change then the investor gets a profit from the carry trade, but if the AUD weakens then he can experience a loss because the carry trade profit is not enough to cover losses due to the weakening of the currency.

To learn more about carry trades, you can visit the FXOpen blog where you will explain how to trade carry trades by discussing regular carry trades, hedged carry trades and pullback carry trades.

 

[Asahi]

Avoiding a big amount of leverage is essential for traders because it accelerates the trading risk. Lowering leverage means lowering lot size and it falls into the jurisdiction of risk management strategy. FXOpulence, indices broker more than a Forex broker, offers decent amount of leverage to traders.