Carry Grid
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Thread: Carry Grid

  1. #1
    Hi all,

    within this thread I want to document something totally straightforward. I'll do some take trading that means moving extended in a currency with interest and short in one currency with low interest to accumulate a few rollovers. To take part from range periods I'll use a grid that means to set stop buy orders over the current price using a spacing of 20 pips plus a tp of 25 pips. This grid is going to be reloaded from time to time. I trade AUD/JPY only for now.

    The most difficult part are carry trade unwinds that arrive with stock market crashes. That doesn't happen too often but when it comes it deep and fast. To safeguard my account I'll use ultra leverage plus some kind of hedging if it goes heavy.

    I have started using a tiny $1,000 account:

    http://www.xaron.net/dl/fx/2010/carr...unt_010610.png

    And that is how it looks like:

    http://www.xaron.net/dl/fx/2010/carry/audjpy_010610.png

    Connect to MyFxBook: http://www.myfxbook.com/members//carry-grid/34000

  2. #2
    Hi ,

    I have very much appreciated your posts for quite a while.

    In my experience, it's simply not worth attempting to get returns from high swap rates. Currency moves can wipe out any benefit at the blink of an eye. I have watched as AUD/JPY dropped over 600 pips in a matter of a few hours when panic selling began in mid March 2008.

    With interest rates as they were subsequently, a 1 lot place (100k) was earning about $18 per day. The 600 pip move on this size place could have dropped around $6000 - that a year of swap at $18 per day.

    My advice... stick to the price movements for profit! Discount swap. Trade short term, as long term tendencies are too uncertain at the moment. The long term picture painted by fundamentals can turn on a dime, opinion and emotions dominate the price action. Look at AUDUSD... long term uptrend from 2001 to 2008 had been snapped by 60% in just a few months. Confidence concerning the commodity boom returned for two years but confidence has been shaken. Price action in June and May seems like the large candles in August/September of 2008. Does any of the price action bear any relation to reality? Who knows! It changes from minute to minute.

    My egy is capturing 20-30 pips in places which are available for (hopefully!) A few hours at the most. My stop loss is 20 pips. If price action is powerful I get around 100 pips. I just trade a couple of times every day following the London available when price action is greatest. However, it's been a trip of 6 steps and 5 measures.

    I wish you good luck, you have been trying for long enough!

  3. #3
    Quote Originally Posted by ;
    In my experience, it is not really worth trying to get returns from top swap rates. Currency moves may wipe out any advantage at the blink of an eye. I've watched as AUD/JPY lost over 600 pips in a matter of a couple hours when panic selling started in mid.
    Truly this isn't a real carry egy because the interest obligations are rather small compared to the PL.

  4. #4
    Small update: Currently there are 4 danglers:

    http://www.xaron.net/dl/fx/2010/carr...unt_090610.png

  5. #5
    I just closed out the 2 danglers at 0.79 for a very small reduction and want to wait for a bit today. I anticipate some dip to the lows. It's not necessary to risk too much. If we create it clearly over 0.79 I'll reinitiate my own grid.

    http://www.xaron.net/dl/fx/2010/carr...unt_140610.png

  6. #6
    Small update:

    http://www.xaron.net/dl/fx/2010/carr...unt_210710.png

  7. #7
    Time for another update:

    http://www.xaron.net/dl/fx/2010/carr...unt_090910.png

    The account develops fairly well, I have added some pairs.

    You can follow along here as well:
    http://www.myfxbook.com/members//carry-grid/34000

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