DislikedCompared to a couple months ago, my carry trade account looks like a completely different accountIgnored
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DislikedCompared to a couple months ago, my carry trade account looks like a completely different accountIgnored
DislikedBut what if Oanda's not around in 10 years?
Imagine if they get into financial difficulty and you were given only a few days to unwind ALL your carry position.... not pretty imo.Ignored
DislikedHi, Scott.
I believed that your existing carry trade would only have a leverage of 20 times due to limit set by Oanda.
Imagine if you would have a leverage of 50 times, your returns will be magnified.
Of recent, I had switched some of my funds to CMC Market. It offered 50 times for all the pairs.
I have long TRY/JPY. For 1000 units, my margin is $14 and my returns is $0.15 daily. After calculations, my absolute return is about 390%.
Regards,
JudyIgnored
DislikedHi Judy,
I know, I'm using much lower leverage. I try to maintain it at only 8:1.Ignored
DislikedScott,
What's the reason behind for maintaining 8:1?
I think that for carry trade, the higher the leverage, the more merrier will be the returns. Based on my previously post, I am literally earning at 1% daily. After 100 days, I would have earned back the margin and that position is "free" and generating passive income.
Regards,
JudyIgnored
DislikedIt's risk control. I'm not as concerned with what I'm making as with what I'm risking, and with staying in for the long haul. Remember the big plunge in equity I had right after the U.S. lost its credit rating?Ignored
DislikedScott,
I understand that risk control is important. What if you can have the best of both world, maximum leverage and no risk at all?
Take for example, EUR/AUD, based on major trend, I did a short at 1.25.
It continue to drop to 1.24, after that, I place a stop-loss at my entry point, 1.25. In this case, I am enjoying good carry with maximum leverage. If in the event that my stop-loss is hit, I do not loss a single cent while enjoying the free carry previously.
Hope it clarifies.
Regards,
JudyIgnored
DislikedScott,
I understand that risk control is important. What if you can have the best of both world, maximum leverage and no risk at all?
Take for example, EUR/AUD, based on major trend, I did a short at 1.25.
It continue to drop to 1.24, after that, I place a stop-loss at my entry point, 1.25. In this case, I am enjoying good carry with maximum leverage. If in the event that my stop-loss is hit, I do not loss a single cent while enjoying the free carry previously.
Hope it clarifies.
Regards,
JudyIgnored
DislikedIt does clarify to a point, but I still have two questions.
1. What if it had gone the other way when you first entered?
2. If the stop is hit and you're out of the position completely, how do you re-enter?Ignored
DislikedScott (or anyone else), do you have this spike on your USD/HUF chart from October/2011?Ignored
DislikedScott,
1. What if it had gone the other way when you first entered?
Prior going for a particular carry trade pair, I will do some analysis on it.
Take for example, TRY/EUR.
a. 1 year trend is up.
b. It is still on uptrend against the EUR, good for me.
c. Historically low is about 400 pips from current price.
If the trade went against me, I do not worry as I have a reserve of cash balance (equivalent to 400 pips losses). What is the chances to break the historically low? I would said it is pretty slim. Hence, I will continue...Ignored