Introduction to Forex Carry Trade
Carry Trade is an effective long-term trading strategy and a strong force driving key Forex trends.
What is Forex Carry Trade?
Forex Carry Trade means selling a low-interest rate currency and buying the same amount of a high-interest-rate currency. The concept is to make money based on the interest-rate differential.
Popular Currencies for Carry Traders
A carry trade will go long on currencies such as the New Zeeland Dollard, the Australian dollar, or the Turkish Lira, and go short on currencies such as the Japanese yen and the Swiss Franc. The most popular currency pairs for carry trading are:
■ AUD/JPY, NZD/JPY, EUR/JPY, USD/TRY, and GBP/CHF
Carry Trade can also mean borrowing in a low-interest rate currency, converting it to a high-interest-rate currency, and buying the highest rated bonds (check the Yen Carry Trade below).
When Central Banks Change their Rates?
Carry trades can prove very effective when central banks increase or plan to increase the level of domestic interest rates. Central banks change the level of the domestic interest rates aiming to achieve long-term financial stability and growth.
(↑) Why Central Banks Increase Interest Rates?
Trading Rebates for Forex Traders
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What is a Forex Rebate Plan?
A Forex Trading Rebate Plan is an incentive program operated by a Forex Broker and an IB where a percentage of the trading cost is paid back to Forex Traders. Joining a trading rebate plan means making money from your trading volumes no matter if your trades close with a profit or a loss. These plans work as promotional tools for brokers in order to attract new customers. CarryTrader.com partner with tens of Forex Brokers to offer traders some of the best rebate deals in the industry.
CarryTrader.com Rebate Plans (Alphabetical Order)