End of Carry Trade -
1 2 3 4 ...

thread: End of Carry Trade

  1. #11
    Agree with here. As long as there are gaps in interest rates you'll have carry trades. If you have a look at carry trades you'll see there's a basket, get the ratios of those pairs at the basket right and you'll make money.
    Are you talking about those ratios?

    Protective Stop-Loss


    Substantial gains made from interest rate differentials offer indisputable evidence that the carry trade egy has been very successful over the last couple of decades. Still, this egy entails significant risks and an adequate protective stop is required. We are using a protective stop-loss equivalent to five times the average true range.


    Position Sizing

    Our standing dimension varies according to each currency volatility. Generally, the more volatile the currency is, the fewer lots we all exchange. By way of instance, let us assume you have $10,000 and you're trading 10K lots, you decide to restrict your risk per trade to 3% or $300 and the 90 days average true range for the EURUSD is 100 pips. In cases like this, if you go long EUR/USD you could buy 3 lots, because ($10000 * 3 percent ) divided by (0.0100*10K) = 3 lots. In case the final result is not an integer you should always rounded it down to limit your vulnerability

  2. #12
    It ends to re-start anew all over again. .

  3. #13
    Junior Member sokypac's Avatar
    2
    I'm definitely long on the carrytrades in the long term.... This is merely a normal, healthy correction.

    The question, nevertheless stays.... Will this really be a brief correction, or a major one. I think this week will be very significant. However, I fear that the crosses are still biased to the downside for this week on account of the summermonths. I'm visiting some nice setups around the EUR/JPY, especially if we get a 1000 more pips south west!

  4. #14
    When we area assessing the market we use technical investigations. I haven't seen any one here use specialized to confess others, It's only a discussions of a behaviour have been used to be seen long time back. I expecting that yen will not hold weeknes any more. I am going to short yen crosess because usdjpy also is leading to a reversal of this trend. When we see an uptrend it's going to be a correction afterward the new down trend will restart. By the way it's going to be a very powerfull down ward directional waves. I will be more pleased if I can view some charts here.

    many thanks

  5. #15
    Junior Member Raxelred1955's Avatar
    4
    Point one. Monthlies

    Recently watched the break to the upside of a long term triangle.

    Current drop seems to be heading for a retest of said triangle. If Valve breaks to the downside, then possibility is bearish in moderate term, but a fracture of the rising trendline at approximately 110 would be needed for confirmation of a long term change in trend.

    The chart also shows numerous occasions in the previous two years where the cross plummeted much more than what we've witnessed in the previous week

    Notice specifically the giant trap pub in 2006, which (using elliot waves - which I hate to do) turned out to be the low of the three wave retrace of a previous 5 wave push.

    It nevertheless turned out to be just a retrace of their current long term trend.

  6. #16
    Junior Member Raxelred1955's Avatar
    4
    It is true that when the trendline breaks there is more room to the disadvantage, yet, on the weeklies a further trendline must be broken in order to confirm a change in the medium term tendency. Probably around 115.

  7. #17
    Junior Member Raxelred1955's Avatar
    4
    Also at the weeklies, we have price now entering an incredibly powerful area of medium - long term resistance as denoted by the price pivot area displayed in blue.

    Price has also attained the 38.2 fib of this fad started in March 06.

    A verified violation of this price pivot would add strength to this situation for a medium term reversal, but I would like it supported by a violation of this 50% fib before I had any confidence whatsoever in calling the end of the carry trade.

    Especially as the reason behind its existence, ie Interest rate differentials, is still very much in evidence and I can't see the acts of central banks doing enough to close the gap.

  8. #18
    Thanks Gmak for ur fine investigations

    in my side

    SELL 119.00, ADD 120.25 ST= 122.50
    TG= 116.50
    TG2=109.00
    TG3=101.69

    there's a chance of trunion, therefore when the price hit 109 we will monitor the movement of the price

    good luck

    Many thanks

  9. #19
    Do not forget the carry trade isn't merely about interest rates, but about the rate fo return.

    A lot of those YEN being sold to buy AUD, NZD, GBP and EUR have been invested in assets demoninated in those currencies, so in case it seems that there is volatility or weakness in these asset groups afterward YEN may be repatriated.

    It is worth keeping an eye on other investement groups if trading anything predicated on varry trades.

    Eternally the recent correction is very little on a long term scale, and I'd expect a blow-off top when this finally endings, which I really don't think we have had yet. GBPJPY may strike 260 ahead of the trend changes with any significance. This is also encouraged by my definition that market transfers are always faster when corrections to the most important trend occur, very similar to what we've experienced in the last few days.

    As always, DYOR.

  10. #20
    Our Trade is active Today

    USDJPY = 118.40 ( 60 pips )

    We must see a Rest of 118.00 in 1:00 GMT for a maximum to Affirm that correction has been completed { Equality Rule of waves )

    Many thanks

  •