Never too late 🙂

Yup, the leverage does increase your carry. You just have to keep a close eye on market risk, which makes it much riskier than a savings account.

Try the carry trade in a demo account, so see how it works with the amount of money you will be trading. Sometimes the carry is not worth going for, especially on smaller accounts. Like stepping over the dollars to get to the pennies.

It all comes down to your plan…I think there has to be a combination of capturing pips as well as percents.

Thanks for sharing Jake!

Hugh

Ok, it’s a little late, but after reviewing the School of Pipsology a second time, I realized there was something I completely forgot about concerning carry trades (or forex in general). LEVERAGE! You earn interest on the size of the money you’re controlling, and not just the amount you put up. Knowing this makes half of my original question irrelevant, as now it’s obvious a trader utilizing a carry trade with leverage has the potential to make more in interest than he could with a savings account.

Yes, on all timeframes.

This daily audjpy system of yours looks promising. Please keep us abreast of any developments.

I can understand he advocates to trade only long in his long-term model due to positive carry, but what about daytrading? Does he suggest to do so even in smaller timeframes, like the 5M chart?

Thanks

Miguel

Hi Miguel,

Thanks! I learned several things from the course, but the main thing was to only trade long. I’m still testing some ideas, but it might be some time before I can develop something solid. Here are the results from my testing:

http://www.tradingheroes.com/a-super-simple-system-tested-audjpy-daily-pin-bars/

Yes, he primarily uses price action with some time-of-day and fundamental analysis. I found it very helpful.

Hope you are trading well…

Hugh

Congratulations on your site. I find your interviews really interesting. Keep them coming!

What did you learn from Chris Lori’s aud/jpy course that you are applying to your trading? Are you actively trading this pair since you bought it? I heard he uses a price action model for short term trading this pair. Did you find it useful?

Thanks!

Miguel

Cool man…let me know how it goes!

Hey,
Thanks for the reply! I just wanted to make sure that a long trade on AUD/JPY wouldn’t yield profits only a bit better than a savings account (excluding those earned from the rise in currency value. Just talking about those from interest rates).

Thanks for the tip. I actually have a demo account at Oanda with Metatrader as well as a demo copy of Forex Tester. Unfortunately, I’m at the point where I’m learning more how to use the platforms than learning actual forex , but I’ll definitely try a carry trade now. I’m also on my second round of the ‘School of Pipsology’ so I figure at least I’m not going backwards in knowledge. Peace!

Hi Jake,

The interest rate differential of 3.15% is just the difference in interest rates between the two countries. What you actually make on a trade will depend on your broker, so you have to check with them to find out exactly what you will pay/receive and when it accrues.

The best way to get a feel for it is to sign up for a demo account with a broker that you think you want to trade live with in the future. That way you won’t risk any money and you can see rollover interest in action.

Hope that helps!

Happy Trading,
Hugh

Not too sure David, worth looking into!