menu search
brightness_auto
more_vert

1 Answer

more_vert
The carry trade strategy is quite popular in the Forex market and is used by both small investors and speculators and large hedge funds. It consists in the trader buying a currency with a high interest rate and financing this transaction with a currency with a low interest rate.

Despite all the prospects of the Kerry Trade operations, it carries great risks. If the majority of speculators decide that the potential of Carry Trade transactions for a certain pair has been exhausted, they will try to close trading positions as soon as possible, which leads to a significant drop in demand, and the profit on the difference in rates does not cover the initial investment and a loss is formed.

The optimal time to open carry trades is when the rate change process begins. At this point, the trader is able to get the maximum benefit from the difference in interest rates. The main success factors in the implementation of these transactions - timely readiness and speed of response.

Related questions

Categories

Welcome to Helpof Q&A, where you can ask questions and receive answers from other members of the community.
...