Hello,

I'm looking for some help. I've been trading successfully for about 6 months, but I have almost no experience with the carry trade. I thought I understood it but maybe I don't. Let me explain.

As I understand, you want to buy a high interest currency and sell a low interest, like GBP/JPY. So logically it would make sense to pick the pair with the greatest interest differential, right? Well, I thought that was NZD/JPY. But here's what I discovered: when I held a GY position of $80K overnight, I was paid $47.28 the next day. Pretty cool. Then, thinking I had really found a cool thing and wanted to max it out, I held a NZD/JPY position also $80K overnight, but was only paid $8.20 the next day.

Huh??? Obviously I missed something here, but I don't know what it is. There's like a 7% or something differential on NZD/JPY, yet I wasn't paid squat, but on a lower differential (GY), I was paid big time.

Can anyone explain? Sorry if this is obvious stuff to most people, but I really don't understand. I'm not a forex newbie so much as I'm a carry trade newbie.

Any help is appreciated!

Thanks...

I'm looking for some help. I've been trading successfully for about 6 months, but I have almost no experience with the carry trade. I thought I understood it but maybe I don't. Let me explain.

As I understand, you want to buy a high interest currency and sell a low interest, like GBP/JPY. So logically it would make sense to pick the pair with the greatest interest differential, right? Well, I thought that was NZD/JPY. But here's what I discovered: when I held a GY position of $80K overnight, I was paid $47.28 the next day. Pretty cool. Then, thinking I had really found a cool thing and wanted to max it out, I held a NZD/JPY position also $80K overnight, but was only paid $8.20 the next day.

Huh??? Obviously I missed something here, but I don't know what it is. There's like a 7% or something differential on NZD/JPY, yet I wasn't paid squat, but on a lower differential (GY), I was paid big time.

Can anyone explain? Sorry if this is obvious stuff to most people, but I really don't understand. I'm not a forex newbie so much as I'm a carry trade newbie.

Any help is appreciated!

Thanks...