long term carry trade system?

Hey guys,

I gotta start taking advantage of positive carry trading question is what's a good long term strategy for getting you in and out of your positions? I'm thinking some kind of simple MA strategy will fit the bill. I saw one that is really simple says:

Go Long when 5 SMA crosses the 200 EMA from below, sell vice versa.

It does seem to leave alot of pips on the table but manages to keep you in the trade to maximize on the carry interest. Can anyone add a better suggestion or a tweak to this basic strategy? Thanks alot.

MAs are ok, .........how about using a 20,2 BB on a daily chart to buy dips on the stronger currency? i dont know how big your account is, but to gain a whole lot from carry trades you need some big $$ or be in the position for a very, very long time (even with the high leverage you'll need some serious $$ or risk taking a position that's too big). your logic is good following the stronger currency......just go with the trend.

Is that Bolinger Bands with periods of 20 and 2?

yes. put it up on a daily. zoom out and look at the long term trend. buy on a dip to lower band with a wide stop. use a larger position going the trend and a 1/2 position going against. basically, let me just step-by-step and let you check it out........

1---find a trending pair like Aud/Usd (but it could be just about any pair if you feel more adventurous) (i have open positions right now on Gbp/Usd, Usd/Chf)

2---Aud goes down to lower 2 dev on the daily bands.

3---get it using smart position-sizing and a corresponding wide stop( i dont have a wide stop anymore as i've been using this for a year and have gotten a feel for the pairs i like. a wider stop will increase reliability if you have an issue with only hitting 3/4 out 10. i hit 3-4 out of 10 and do just fine because of the next step.....)

4---increase your position size as the trade goes with you. for example, let's say you get in Aud/Usd at .9500 with 10 minis and you're risking $120, you'd set the initial stop at .9380. if the trade goes to .9620 you'd move your initial stop to .9500 and buy another 10 minis (im using these numbers for simplicity). i normally will do this at least twice when going with the trend and only once when countertrend (like yesterday when i shorted Eur/Usd). if you want to go against trend in the above example, only sell 5 minis and only double once. i normally exit at the opposite band but i'll give some back and trail my position in case it breaks through the other side. using a pyramid/scaling in system, your profits will truly run. the catch is dealing with only hitting less than half and being able to psychologically handle that. if you ride your winners, you'll soon be cured of that disease.

5---even though this is a swing-type of trade, you'd be surprised how often you have opportunities. b/c pairs are so crossed/interrelated, i'll choose the pair with the biggest trend or differentials in fundies.

6---that's it. it works for me and i dont have to stare at charts all day. at work i'll peak at current levels, but normally dont ever have to adjust anything until the evenings. simple and effective. some people like to spend 95% of their time on setups that involve 134 different indicators just to get to be right 60-70% of the time with tiny wins. if you like that, there are a million of those posted in the systems forum.

either way, good luck to you!