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carry trade for 3--5 years

  • #21
  • Mar 6, 2008 4:29am Mar 6, 2008 4:29am
the problem I forsee is a 9/11 style catastrophe ----> instant margin call. and since this strategy relies on being invested for years to be worthwhile, the chances of such an event are greater.
TRADE FOR SWAP
  • #22
  • Mar 6, 2008 9:06am Mar 6, 2008 9:06am
Quoting cgldsmth
the problem I forsee is a 9/11 style catastrophe ----> instant margin call. and since this strategy relies on being invested for years to be worthwhile, the chances of such an event are greater.

Yes , YEN base carry trade seems very difficult in bear market, my plan is to wait for the bottom to go long and get out at 38% or 62% retracement.
I think non YEN base carry trade still has change , such as EURTRY .
  • #23
  • Mar 6, 2008 4:18pm Mar 6, 2008 4:18pm
Current status
Unrealized P/L: -3,614.89 (~500.00 from a margin call)
Interest: +330.71
  • #24
  • Mar 9, 2008 11:43am Mar 9, 2008 11:43am
Quoting byorkFX
Current status
Unrealized P/L: -3,614.89 (~500.00 from a margin call)
Interest: +330.71
I know , one of my account opened 1 month agao already MC

another opened last year, still could last a bit, but i doubt it will if this trend continue ,,


Quoting ultraboy
Yes , YEN base carry trade seems very difficult in bear market, my plan is to wait for the bottom to go long and get out at 38% or 62% retracement.
I think non YEN base carry trade still has change , such as EURTRY .
yup, i';m using EUR/TRY, but the swing is very large now, and the interest earned might not sustain the big swing,,,


Quoting ultraboy
I am planning and waiting for try/jpy goes buttom to enter this trade.

Since the market is bearish, I will not keep the position open for long time, the gain and loss on the try/jpy itself is a lot more interesting than 39% per year.

Since you mentioned AUD deposit in the beginning of your post, You may consider shorting AUDTRY , if you base currency is MYR and do 1x leverage than what do you will be equivalent to short MYR long TRY ( convert MYR to AUD as deposit then short AUDTRY)

I am using SAXO Singapore
Saxo, i planned to use since i'm from malaysia, but i just don;t like the idea of "no swap" where they change the entry everday to "deliver the swap" and also they dun support micro lot like oanda does..

with current trend, i think it's better to stay out 1st ,
do u have any idea when to continue our SWAP strategy?
  • #25
  • Mar 9, 2008 9:37pm Mar 9, 2008 9:37pm
with current trend, i think it's better to stay out 1st ,
do u have any idea when to continue our SWAP strategy?[/quote]


My guess-timation is in the attached pdf. I might be wrong.
Basically I will NOT keeping it for 3-5 months. I will get out as soon as it reaches 38% or 62 % retrracement level
Attached File(s)
File Type: pdf tryjpy.pdf   29 KB | 339 downloads
  • #26
  • Mar 11, 2008 1:14pm Mar 11, 2008 1:14pm
Current status - Margin Called
Realized P/L: -4,311.28
Interest: +387.41

This is pretty much what I was talking about in my first post where a margin call is too easy to get. If the trade was started at a much better price point then I think that this strategy would have a better chance of surviving a margin call, but it's still VERY risky. The interest just can't build fast enough when the carry trade pairs are unwinding.
  • #27
  • Mar 15, 2008 1:26am Mar 15, 2008 1:26am
Latest update ,

2 weekd ago, the account opened in Feb got MC.

and this week,
2 accounts that opened last year, October , both also MC .


seems like the risk for this strategic is very real+high ...

by the way, which website has the chart for TRY/JPY?

i hope to enter when the price hit rock bottom, and for the time being earning the AUD daily swap ..
  • #28
  • Mar 16, 2008 9:02pm Mar 16, 2008 9:02pm
Quoting paogeh
Latest update ,

2 weekd ago, the account opened in Feb got MC.

and this week,
2 accounts that opened last year, October , both also MC .


seems like the risk for this strategic is very real+high ...

by the way, which website has the chart for TRY/JPY?

i hope to enter when the price hit rock bottom, and for the time being earning the AUD daily swap ..
Yen carry trade only work well in Bull market , I will NOT use leverage more than 3
SAXO or google search tryjpy=x
  • #29
  • Mar 16, 2008 9:13pm Mar 16, 2008 9:13pm
open demo with odls for try/jpy chart.

Quoting paogeh
Latest update ,

2 weekd ago, the account opened in Feb got MC.

and this week,
2 accounts that opened last year, October , both also MC .


seems like the risk for this strategic is very real+high ...

by the way, which website has the chart for TRY/JPY?

i hope to enter when the price hit rock bottom, and for the time being earning the AUD daily swap ..
  • #30
  • Apr 26, 2008 2:18am Apr 26, 2008 2:18am
I see there are many of us that see carry trades as still possible and sensible in the long term.

I am also practicing (but have just this week opened the first position) a long-term carry trade position on TRYJPY.

My strategy:

Leverage 4:1
Every three months a new position is opened (and funds transferred to trading account)
Position entry is 2:1 + 2:1 (within a span of 1 month), if I assess that the price on the day of first entry is low, i enter at 4:1 immediately.

Term to capitalization: 5 years. During that time of the investment every 6 months an assessment of current state and technical analysis for the pair. After 5 years, if all the planets are in the right alignment just collect the interest and currency rate differential profit.

Thats the strategy, we'll see how it works out.
Greed and impatience are our greatest enemies.
  • #31
  • May 1, 2008 2:15am May 1, 2008 2:15am
Quoting Rabax
I see there are many of us that see carry trades as still possible and sensible in the long term.

I am also practicing (but have just this week opened the first position) a long-term carry trade position on TRYJPY.

My strategy:

Leverage 4:1
Every three months a new position is opened (and funds transferred to trading account)
Position entry is 2:1 + 2:1 (within a span of 1 month), if I assess that the price on the day of first entry is low, i enter at 4:1 immediately.

Term to capitalization: 5 years. During that time of the investment every 6 months an assessment of current state and technical analysis for the pair. After 5 years, if all the planets are in the right alignment just collect the interest and currency rate differential profit.

Thats the strategy, we'll see how it works out.

wow ! thanks for replying in my thread,
my current status now ==LIVE ACCOUNT


strategy ===
i split half of my "swap" lot to "hedge/speculate" lot,
meaning , i'm supppose to open 2 lot of TRY/JPY, i only open 1lot, another 1lot i used for short term "hedge/speculate" ,

when TRY/JPY goes down, i'll LONG small lot of EUR/USD to make some quick gain.


so far, using this method, i still gain daily swap and pips, the return is good, 80% of the profit comes from pips gain,

Hope this would help,
  • #32
  • Jul 10, 2008 7:18am Jul 10, 2008 7:18am
Nice strategy,

Instead of leaving the pair swings, have it managed by an EA.
The EA I am now developing (90% finished), with 250$/1 micro lot, 100:1 leverage and mainly on USD/JPY (since lowest spread).

It can survive a 2400pips ride ( $250-$10 ) / 0.1

Start date: July 7, 2008
Starting Capital: $250

Current Status:
Realized pip Gain: $52
Unrealized pip Gain: -$20.8
Swap interest Gain: 5.85
Net result: $37.05(14%)

This system is scalable to any account size. Once the system is finished(according to my standard) and I will post it for everyone to forward testing it.
If everyone believes it, it will work.
  • #33
  • Jul 10, 2008 7:46am Jul 10, 2008 7:46am
AUD is going up if you look at fundamentals, and this pair is pretty cheap to enter a trade with. My plan is to continue to trade long on this pair. When I trade I enter with two contracts, one has a take profit equal to twice the stop loss. When the first trade takes profit, it essentially pays for the second one if it is ever stopped out. Then, when I'm in profit I will take another trade (scaling in), my aim is to build up to 50% of my margin which will be getting me well over 100% p.a. interest. Twice I've had half my margin on a long carry, unfortunately I've been stopped out, but I still earnt pip profits both times, plus the carry interest.
Ultimately when I have half my account on a trade I will slowly add more position as I earn interest and see that my average position is below tested resistance... it's a plan, lets hope it works
  • #34
  • Jul 12, 2008 9:49pm Jul 12, 2008 9:49pm
hi mar,

see if I understand you.

say you got $20,000 in capital......at 50:1 = $ 1 mil trading capital

so you work up your position slowly to $ 500,000 and get out if your stop is hit.
is your SL a certain amount of pips or a percentage of purchase price?

seems you do it a lot smarter than letting the price run amok like the others are proposing.

could you give me an example please?

thanks
  • #35
  • Jul 13, 2008 2:53pm Jul 13, 2008 2:53pm
There is no doubt that TRY/JPY is an attractive carry. I wish to point out two hypothetical scenarios that would definitely spoil the plot.

Least likely scenario - North Korea lobs another missile a bit closer to Japan.
Not very likely and it would have serious consequences for most traders with carry positions open - although probably in a strangely positive way.

Much more likely scenario - Iran bombs the Turkish Kurds
Well they would perhaps prefer another target but choose this out of expediency. Again the native currency would dive, but this time you are long in the native currency so <wipe-out>.

Of course I believe that neither scenario will happen, and we shall continue to live in peace and harmony.
Minesweeper target: 284
  • #36
  • Jul 13, 2008 5:23pm Jul 13, 2008 5:23pm
Quoting yonnie
hi mar,

see if I understand you.

say you got $20,000 in capital......at 50:1 = $ 1 mil trading capital

so you work up your position slowly to $ 500,000 and get out if your stop is hit.
is your SL a certain amount of pips or a percentage of purchase price?

seems you do it a lot smarter than letting the price run amok like the others are proposing.

could you give me an example please?

thanks
That's pretty much how it works. My SL is a variable amount of pips based on market conditions. The main thing for me is to make sure my TP covers the SL's, then I leave them there. After a while, seveal months maybe, I will probably move my SL's up but keep them well clear of strong retested resistance. By this I mean when the daily charts have hit the same low a couple of times on seperate waves. I'm not advocating a particular way of getting into or out of the market, just trying to give some ideas on a way that might be good for money management... ie don't just put half your account on a trade and hope you don't get wiped out.
  • #37
  • Aug 16, 2010 10:20am Aug 16, 2010 10:20am
Hi Everyone...

I am Turkish, from Istanbul, Turkey. I plan to do what people described in the previous pages. I made the same calculations and come to conclusion that it is very profitabel and the time is ripe for this trade. I will go long for TRY/JPY. Do anyone else think that the pair is bottomed enough to start a 1-2 year long carry trade?

I may use 10.000 USD and may open just a 0.5k position. I will have a margin for 1900 pips. The pair is currently at 57.00 and I will not get any margin call until it trades for 38.00 in a month or so. I believe that is highly unlikely since the economy here in Turkey is very robust and TRY will gain against all currencies in the next 2-3 years.

I have accounts at FXCM and ODL. I plan to open an account at Saxobank. I just don't know which one to use this trade. Which company offers the best swap rates?
  • #38
  • Last Post: Aug 11, 2012 2:17am Aug 11, 2012 2:17am
BrowSing an old thread

Imagine building shorts on this pair over the last 2 years, moving stops to BE every week or so, scaling into the trend, millipede style.
Combined with the swap - £££££££££

The key to this is the positive equity build up with a largeositive trailing stop on the whole batch of positions, making the black swan event of Iran bombing Turkey less likely to margin call.

Problem is - the broker will probably not honour the stops (frozen feed, wide spreads and other such crimininal shenanigans).

Cg
TRADE FOR SWAP
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