Super Carry Trade Trading System

hi every one i know that iam late but iam new in the forex markets and aim looking for something to make a lot of profits from it ......so this may look usefull(i mean this thread ) and if ther any one how could help me ,

when to inter ok long i got it but what about the tp and the st ????

any one have live results per each month ?

thanks a lot and goodluck.http://cdn.forexfactory.com/images/icons/icon14.gifhttp://cdn.forexfactory.com/images/icons/icon7.gif

I want to ask if the carry trade is still profitable or not?

My guess is no, too risky

Why do you think that carry trade to risky? Anyone have experience about carry trade? thanks for your kind explanation.

Hey guys.

First a disclaimer: I'm a noob and only started learning about forex about 3 months ago, so many of my assumptions may be incorrect.

The main reason this system has been unsuccessful is because of overleveraging to a point where it cannot sustain the market's long-term trends. I was pondering on this today and came up with a few ideas to try to remedy this problem, but they are currently just that - ideas. I'm hoping you guys can help me smooth out the edges and forward/backtest the result in the hopes of making it a much more viable and profitable system. Unfortunately in between study and work, I have very little time to go through years of data for optimization.

So my aim was to keep this system a consistent earner, while lowering overall risk to as close to zero as possible. The following ideas are all dependent on the hope that XAU/USD will not drop more than...say for the purpose of this explanation, 75,000 pips; which is well more than 50% of it's current value. If it does...margin call (note that I know nothing about gold, I'm just assuming it's a safe bet and wouldn't plummet that far, and that in the long-term, it will always be bullish; if I am wrong, please correct me, and I'm sorry for wasting your time).

Now, these next numbers aren't set in stone, I'm just using them as an example. Let's buy in increments of 100 pips (or 500, whatever), with TPs the same and no SL, in the same fashion as the original system. As the market eventually inevitably goes against you, you only reenter every 10,000 pips, and then start incrementing up again. This means if we use a risk model of 20% per 50,000 pips, and a maximum of 5 reentries, we could weather a drop of over 75,000 pips ( I think...:S ). [Just clarifying - you would risk 20% of your account for every 50,000 pips the market drops, for each entry.] As per the original rules, close all orders once market price reaches average price.

Now there are three potential problems that I can see that would either make or break this system, and I'm hoping you guys can help me figure out if the system would be viable/profitable.

1. Using this risk model, every 100 pips gained would only net you 0.04% (hope that's correct, just did it in my head) of account equity. Of course on the flip side, if my previous assumptions are correct, there is almost no risk. But let's keep in mind XAU/USD is very volatile and moves thousands of pips every day.

2. A reentry grid of 10,000 pips is pretty huge. Price will sometimes inevitably sit between entry levels for days, even weeks - meaning during that time, you make no money. For this system to be viable, we must be in the market incrementing our orders for a significant enough amount of time out of the year. I'm hoping someone can help me work out the details.

3. Rollover costs. Obviously our gains must significantly outweigh the costs. I don't even know how to begin to work out the math, so I'll leave that to someone else.

That's pretty much it. Feel free to change anything you see fit, maybe even the currency pair - if the rollover problem is the killer, perhaps go back to a carry positive pair.

Once again I apologize for not having everything worked out - I simply don't have the time. Tell me what you think.

Thanks
C

Hi,

I am using this system last six month and it is true that we can make a profit of 10% per month. It is all about money management and using the hedge. I am currently trading in AUD/JPY

George

Sorry but I read that 7 times and I still don't get it.
Surely I understand what happens if the market goes up.

But what if 2 or 3 Long orders are triggered and than market starts to spike down ?

- Do you use Stop Limits ?
- How do you protect yourself from loses ?

If you'd explain in "plain slow English" I'd appreciate

But what if 2 or 3 Long orders are triggered and than market starts to spike down ?

Sell orders will be there in place below 500 pips equal to total open position.

- Do you use Stop Limits ? (sure, 300 pips)
- How do you protect yourself from loses ? Hedge is enabled in my account and it is a major draw down I will neutralize the trade by opening a sell trade and wait for the market to cool down.

If you'd explain in "plain slow English" I'd appreciate

Hello,

My account is still active in spite of the recent JPY draw down. We have to be alive so that we can participate the game....it is important to me

George

Wow, you've been trading this over a year and a half? Are you trading it live? How is your account doing?

Dear Dreamliner,

Nice to see you here again after a long time. I like your post very much.

I am trading in live account with FXCM both in Micro and Standard account.
I am not strictly following to the original concept. I like the concept and locking the profit every 10 pips and averaging the positions. I am expecting the large draw down and spike that happened last moth with JPY pairs hence sell orders will be there in place without stop loss and take profit below 500 pips of the current position. And I will make sure that the required equity available to reach there in 500 pips down and trade will be neutralized.

In short, the super carry trade concept is good system. Instead of blowing the accounts I may be loosing for the negative side of the carry trade for few weeks.

George

Hey! So this may seem like a really "Noobish" Question to be asking you but I'm new to Forex trading and was look through the systems and I liked the ideas of yours, it seem easy and simple! The problem is Im having a hard time trying to set the profit targets on 10 pips? And just so I understand you set a limit order to the current pair at 10 pips above what you want it to be at and you set a take profit at 200 - 400 and a tailing stop at 10 right?

Thanks

This all reminds me of GBot (http://www.datatime.eu/public/gbot/)
Anybody used it wth FX ?

Hi George,
This seems to be a good system I have long been looking for a carry trade system that works I feel most of the winning traders in FX use carry trades the thing I am having a problem with is position sizes can you please let me know how you calculate them.
Also the unwinding do you handle that as in the first post or do you do it differantly?
Regards Ralph

It is true that professional traders are using carry trades in their portfolio.
At any point of time I will be using less than 5% of my equity.
I am handling unwinding in a different way. I wont allow my account to close due to unwind and instead of that I am using hedge to stay alive. I am closely monitoring the trend and if the trend is down I will be more careful.

George

Can I suggest that if you're with MB Trading, not to place your initial order as a market order but in between the spread as a limit order. This is because MBT are currently paying for limit orders and therefore makes this system potentially more profitable.

Dear Xaron,

What is your opinion to carry AUD/JPY at current levels?

George

Hi George,
thanks for the reply hedging does make sense.
If you use 5% for carry trades what is your preferrd method for the other 95%?
Regards Ralph

Hi Ralph,

I have tested several systems and strategies last two years. I am not believing in automated systems. As I am following this Super Carry Trade trading system I am able to make profit from both trading and carry interest. Currently I am trading with AUD/USD and AUD/JPY and I stopped to carry AUD/USD once this pair crossed 1.0500 level and still holding AUD/JPY.

The uncertainty remains in Forex market now a days due to currency war and natural disasters. Hence, I will keep balance 95% as a cushion to my open positions.

If the opportunity strike I will open more positions like that happened last month with AUD/JPY and I closed the positions with 1000+ pips with in one month time frame. I will be holding the unused margin for this kind of opportunities.

George

Hi George. Long Term I think you have the right approach. I think it's prudent though to spread the risk. Even if it means paying a little for it. As long as you put yourself in the best position to get paid in the end.

By the way I love this line of yours...

It is important to me too George. Never risk death. Lets stay alive in this game. Good luck sir.