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An Expert Guide To Learn Advanced Trading
Strategies For Forex Part 2Carry Trade
Strategy
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INTRODUCTION

• One of the most important aspects of currency
  trading is creating an effective Forex trading
  strategy. To make a profit, traders should work
  on reducing losing trades and improving winning
  trades.
• Any trading strategy that helps you achieve this
  goal has the potential to be rewarding. In
  general, several types of traders have
  established a wide range of trading tactics to
  help you earn in the market.
• A trader must learn Advanced Trading Strategies
  that are appropriate for their forex trading and
  investment horizon.

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SEVEN KEY FOREX TRADING STRATEGIES

• Experts from The Fido Academy will go through
  seven key forex trading tactics in a set of
  well-defined articles as part of an endeavor to
  educate and enlighten the minds of prospective
  traders.
• Breakout Trading Strategy
• Carry Trade Strategy
• Fundamental Analysis Strategy
• Momentum Trading Strategy
• Range Trading Strategy
• Trend Trading Strategy
• Moving Average Crossover Strategy
• Each article is easy to understand and ideal for
  individuals who are still honing their skills. In
  previous article we saw the Breakout Trading
  Strategy and now We'll take a closer look at the
  Carry Trade Strategy in this article.

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What is a Carry Trade Strategy?

• A Carry Trade is an investment strategy in which
  a high-yielding currency funds a low-yielding
  one. A trader who employs this method tries to
  profit from the disparity in rates, which can be
  significant depending on the level of leverage
  used. 
• In the forex market, the carry trade is one of
  the most common trading methods. Because the
  interest rate spreads on these currency pairings
  are relatively broad, the most popular carry
  trades have been buying currency pairs like the
  Australian dollar/Japanese yen and the New
  Zealand dollar/Japanese yen. Identifying the
  high-yielding and low-yielding currencies is the
  primary stage in putting together a carry trade.

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The Basics of a Currency Carry Trade

• The Carry Trade is among the most often used
  currency trading methods. It's similar to the
  adage "buy low, sell high." The comfortable
  pathway to start a carry trade is to spot which
  currency has the highest yield and which has the
  lowest.
• The most common carry trades include buying
  currency pairings with wide interest rate
  spreads, such as the AUD/JPY and the NZD/JPY.

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• Mechanics of the Carry Trade
• As long as the exchange rate between the
  currencies does not change, a trader can profit
  from the differential in interest rates between
  the two countries. Many professional traders
  utilize this strategy since the profits can be
  substantial inclusive of leverage. If the trader
  in our example chooses a common leverage factor
  of 101, he stands to profit ten times the
  difference in interest rates.
• Best time to Get in and Get Out
• When central banks are increasing or considering
  hiking interest rates, it is the perfect time to
  enter a carry trade. Many people are jumping on
  the carry trade bandwagon, causing the currency
  pair's value to rise. Similarly, at times of low
  volatility, these trades work effectively.
  Because these traders are willing to take on more
  risks, The Traders will get rewarded until the
  currency's value does not collapse. 
• However, traders will not benefit awesomely from
  a period of interest rate lowering in Carrying
  trades. The change in monetary policy has
  resulted in a variation in currency values. When
  interest rates fall, demand for the currency
  falls as well, making it tougher to sell the
  currency. Essentially, there must be no movement
  or some degree of appreciation for the carry
  trade to be profitable.

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For More Info

• Visit https//thefidoacademy.com/
• Contact no (91) 82484 64994
• Mail-id info_at_thefidoacademy.com