carry trade

I' m looking at a simple tradeing system
based on high interst rates and trend trading

pairs might be
ie. GBP/JPN USD/JPN EUR/JPN , USD/CHF etc
would anyone _____?


the set up is
ema 50 (green) 100 (red ), 200 (green)
sma 200 (red)

the MA will be used to check the trend & strenght of trend
ie. green over red green over red etc


I plan on trading only with the interst rate and the trend.

when the pair comes down & touches the 50 EMA then I will buy two units
Then buy two more fore every 100 it drops.

I will close 1/2 of all open trades when price reaches 100 pips over the 1st trade

& let the other ride till stopped out by 50 SL


does anyone have any Ideas

I would focus on 4 pairs, gbp/jpy, usd/jpy, eur/jpy and nzd/jpy. By watching gbp, eur, and usd JPY pairs you will take advantage of each individual currencies strengths. When gbp and eur are weak, often times usd is strong. Thus if the JPY trend continues, the USD/JPY will be your pair. NZD/JPY is important because it has the best % interest, 7.25 vs .25.

You do not mention a chart time, use no smaller than 1hr, prefer 4hr charts.

I have not looked at those EMA, SMA setups, though stick with the thought for sure. Even if you do get away from the interest game of carry trading, all the JPY pairs have been trending. The easiest way to make money is find very good trending pairs..... thus 80% of the time going in the same direction. Wait for a pullback and go along for the ride.

Of course, at any time JPY could make a very fine move. If this happens use chf/jpy to trade in the short position, you wont hurt bad holding, only 1.75% interest.

I was thinking of doing day charts.
maybe 3-4 hour. But they would still have to be trending in the direction as the day trend .. I think I would look for a pull back to the 100 ema on the 3-4 hour.


any other pairs

thanks

I would also try GBP/CHF

I looked at the pair you spoke of & on the 3 hour chart it meets my rules so I took the trade .

never traded this pair ( i did a very small trade) I trade the pound a lot what do to need to watch with the swissy/ & this pair?

up 22 pips!!

7 trade in 48 hours in 5 pairs over 576 pips & counting!!!

If you have 7 trades in 48 hours, what does it have to do with carry trades?

good point

I had 100 pips TP for one of the 2 units of each of my trades`
(or there abouts I keep my eyes on the 50 & the 100 on the charts)

& when I got up ```6 units of my trades where "gone"!
I was planning on holding longer
but i am still in the trade with 8 units--what would you calll it?

I guess its swinging with the trend" ?

its plan B buts its ok -
I moved my SL up so I will makee at least 50 on the other 8 units?

its all good

Very interesting.

Has anyone else noticed the irony in the timing of this thread?

not really

why do you....say that?

its worked out very well so far !!

I Am up about 850 pips in the bank
with about 190 pip still in, 3 trades
2 GPB/JPN & 1 USA/JPN

Iwill likely close every thing off before NFP tomorrow

so why do you say that?

I'm not knockin your system, I'm sure it will do well for you. Merely pointing out that since the first post of the thread all the main carry pairs have been in a steady march downward.

The forum is like a consensus indicator. As soon as you start hearing about something discussed alot, it is a good sign the end is neigh. These pairs have been in uptrends for months, and only now are we hearing about the wonders of carry trading. It was a huge moneymaker for everyone in december of 05 as well as april and october of 06. Shortly thereafter the interest money vanished for everyone involved.

Just be careful not to let the interest accrual keep you in a bad position.

thank -you

I do agree in fact I just closed off one of the 3 trades the biggest by far.

I think just about anything could happen tomorrow and/or next week

I think I hear you saying the same thing.

thanks again

I wouldn't worry too much about tomorrow. The market is losing faith in NFP do to the constant revisions. Essen is the real event risk.

yes I agree !
What do you think will happen ?

Either well have a sell the rumor/buy the fact situation leading into it or the EU will get its way and the Jpy will get clobbered. Given the rediculous heights achieved in the pairs over the last year, I'm leaning towards the latter. Either way I imagine there will be some decent risk reduction trades taken over the next couple weeks.

EDIT:/ Damn it, I always do that. I meant the JPY "PAIRS" will get clobbered.

The double bottom on GBP/JPY is bouncing off the 38.2% fib retrace on the daily chart (roughly 228.00 - 241.50). Then we have the 50% fib which matches up perfectly with the top that was formed around the end of last year/start of this year. Even the next fib down could have some trendline confluence as well. I think all 3 of these areas will provide major support, but if they break then well, there could be a reversal in the air.

what do you think will happen to the carry trade
with the G7(8) on thursday & friday?

I would consider with a carry the Brazilian real with JPY - greatest interest differential - just need access to it