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Thread: Carry Grid

  1. #1

    Carry Grid

    Hi ,

    within this thread I wish to record something completely simple. I will do some carry trading which means moving long in a currency with high interest and short in one currency with low interest to collect some fine rollovers. To take part from range periods I will use a grid which means to set stop buy orders over the current price with a spacing of 20 pips plus a tp of 25 pips. This grid will be reloaded from time to time. I exchange AUD/JPY only for now.

    The most difficult part are carry trade unwinds which arrive with stock market crashes. That does not happen too often but when it comes it's usually fast and deep. To safeguard my account I will use ultra low leverage plus some sort of hedging if it moves too heavy.

    I have started with a little $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

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

  2. #2
    Small update: Currently there are 4 danglers:

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

  3. #3
    Quote Originally Posted by ;
    In my experience, it's not really worth trying to get yields from high swap rates. Currency moves can wipe out any benefit in the blink of an eye. I have watched as AUD/JPY lost over 600 pips in a matter of a few hours when fear selling started in mid March 2008.
    Truly this isn't a real carry egy because the interest payments are somewhat small compared to the PL.

  4. #4
    I just closed out the 2 danglers in 0.79 for a very small reduction and want to wait for a bit today. I expect some dip into the lows again. It's not necessary to risk a lot of. 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

  5. #5
    Small update:

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

  6. #6
    Time for another update:

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

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

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

  7. #7
    Hi,

    I've very much appreciated your articles for quite a while.

    In my experience, it is not really worth trying to get returns from top swap rates. Currency moves can wipe out any benefit in the blink of an eye. I've watched as AUD/JPY dropped over 600 pips in a matter of a couple hours when fear selling began in mid March 2008.

    With interest rates as they were subsequently, a 1 lot position (100k) was making about $18 per day. The 600 pip move on this size position would have dropped around $6000 - that's almost a year of making swap at $18 per day wiped out in just a couple hours.

    My guie... adhere to the price movements for profit! Just ignore swap. Trade short term, because long term trends are too uncertain at the moment. The long term picture painted by fundamentals can turn on a dime, belief and emotions rule the price action. Look at AUDUSD... long term uptrend from 2001 to 2008 was snapped by 60 percent in just a couple of months. Confidence about the commodity boom returned for two years but confidence was shaken again. Price action in May and June looks spookily like the large red candles in August/September of 2008. Does any of this price action bear any relation to reality? Who knows! It changes from minute to minute.

    My egy is capturing 20-30 pips in positions that are available for (hopefully!) A couple of hours at the most. My stop loss is 20 pips. If price action is strong I occasionally ch around 100 pips. I only trade a few times every day following the London available when price action is best. Up to now so good, however, it has been a trip of 6 steps forward and 5 steps back.

    I wish you great fortune, you've been trying for long !

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