Trial pure carry trades - how will it turn out????

[RahmanSL]

As stated in above post#39:

**NB: For those who are looking for, and is happy with 8-20% annual returns on their deposit, this is the strategy to use.
Determine the trade lot size required to realized your target percentage returns in daily positive swap value, wait for a fairly good entry point, place your trade (or trades), close your computer and leave the trade (trades) to run for the next 365 days. BUT remember to log-in to become active (depending on your broker's T&C) at least once every 3 months or else your account might be closed/suspended due to none activities over extended period of time.


The attachment screenshot tabulations on how much positive swaps you will require to achieve your target yearly returns.
The tabulations clearly show that you don't need complicated analytical skill nor fancy EA/Robot/what-have-you out there costing ridiculous amount of money to make your 10-20% returns on your deposit/capital.

In fact, it's so freaking simple that every analyst seeking payment for their services promising to make you the same percentage returns that they are probably cursing me for pointing out to you the plain simple truth on how to achieve that without them.

Institutions also make huge profits from your hard earned money and paying you pittance (6.5%?) in returns for depositing your money with them.

Now the rest is up to you....or perhaps I should start charging you ridiculous amount of money for this free advice to make you take notice and try out my strategy.....like that computer programmer who couldn't get any company to try out his excellent program until he started charging fantastic prices before they start using his program. He is now a multimillionaire!

 

[LoRio]

your broker must love you for this

 

[RahmanSL]

your broker must love you for this

The jury is still out on whether my broker loves me or otherwise, but in the last 2.5 months alone, I think their trades commissions from one of my account was over AUD6k

 

[RahmanSL]

UPDATES:

From a loss at the start of the month, I open & close some trades and, ending Friday, 27/June/2014, managed to increased the account to 46.97% profits over total deposit........free margin is 1,217.58%

A mixture of short trades on USD/ZAR, EUR/ZAR, and EUR/SEK are left running, receiving total AUD24.14 daily positive swaps and, if left to run for 1 year, will total AUD8,811.10 in positive accumulated swaps.
I will close some trades as they go into into some decent profits and re-open some more when price goes back up.

As mentioned in previous updates, this is no longer "pure carry-trades" strategy and, since I am trading both accounts with the same strategy, I am considering abandoning this thread to merge my two trading accounts back into one ......i.e going in short on the high side on high yielding daily positive swap pairs (in order of preferences: EUR/ZAR, USD/ZAR, EUR/TRY, USD/TRY, EUR/NOK, EUR/PLN, EUR/SEK, and GBD/NOK)....closing out trade if it go into some decent profit, reopening short trade if price go back up, and leaving ALL losing trades to run to receive daily positive swaps.

 

[ilearn2t]

Hello RahmanSL

I was doing some research into another broker and noticed in their "Terms & Conditions" a rule that restricts the "Swap" to a limited amount.

If the total swap on all the trades made exceeds USD5,000, the Company reserves the right to correct it to USD5,000 in certain cases.

Looks like they mean all orders open & closed.

Hope your broker has no such rule.

Good luck
Liz

 

[RahmanSL]

Hello RahmanSL
I was doing some research into another broker and noticed in their "Terms & Conditions" a rule that restricts the "Swap" to a limited amount.
Looks like they mean all orders open & closed.
Hope your broker has no such rule.
Good luck
Liz

Hi Liz, hope everything is going great for you

...hmmmm...interesting question which I am interested to ask my broker and shall post back here when I received reply.

However, I don't see that T&C with my broker ICMarkets (which is ASIC regulated) and so assume (for now) that they have no restriction cause swaps are, and should be rightly so, set by their LP who pay or charge for overnight rates (swap).

Thank you very much for bringing my attention to that info on swap T&C with other brokers

Take care and all the best.

 

[FuLuShou]

Hi Rahman,

Thanks for your interesting trading journal, definitively you are right about the concept of focusing on long term trades rather than intraday trading. Intraday and short term in general is too volatile and keeps you too many hours in front of the trading screen while anything long term is more rewarding and less stressful. An acquaintance who has been working in trading for the last 30 years has now four coronary bypasses so I guess this occupation takes its toll.

Please forgive me if any of my questions seems naive or lay, I'm learning the ropes and started a trading journal as a learning tool a couple of days ago. I would be very grateful if you would post a bit more detailed information on your calculations, for example:

Based on previous experiment on a Demo account, after keeping the position running for one month, the accumulated positive swaps is sufficient to offset any more future losses on the running position which, unless something drastic happen, will be next to impossible to lose from there onwards.

Could you post a picture of the trading screen for USD/ZAR to support your claim. Where would have to reach the USD price to offset the accumulated swap in your trade if that is possible? Here are my calculations based on your values given in your first post:

My trading screen will vary in respect to yours but roughly will show similar results. As my novice analysis show a bull flag seems to be forming so the price may not reverse its trend in the short term until it finishes the flag.
If you started a short order in 9 May the accumulated losses in pips are: 10.33969-10.75760=-0.41791=-4179 pips
Swap rate for USDZAR in ICMarkets is: 25 pips per 1 lot. You opened 2x0.05 positions so the swap is 2x5/4=2,5 pips per day
51 days have passed until today so the accumulated swap in pips is 51x2.5=127.5 positive pips
Your total profit/loss as of today must be from my calculations 127.5-4179=-4051,5 pips
Are you sure this is a strategy as profitable as you say?

If I have more than 5 positions opened and all of them go into some profits, I will close out two positions taken at the lower levels and maintain the top three positions for the long haul...however, when the price goes back up, I will re-open two more trades at the higher levels......and if I can repeat this process a number of times, I will end up with some very strong positions to run for as long as I like.

This strategy I don't understand completely. If you have five short orders and they go into profit you'll close the two lowest and keep the other three so you gain more free margin and increase your account size. But if the price go up you'll reopen more trades at an upper strong resistance level no? But isn't that risky? If the price breaks the resistance level and keeps going up not ony you'll lose the benefits of your first three trades but the new ones you open will lose as well. Are you sure the accumulated swap from the first three trades will be able to offset the loss from all those opened short orders?

I chose USD/ZAR for my "carry trades" for the simple reason that it's the highest positive swap rates given....next is EUR/ZAR.

I've checked your broker's swap rates (icmarkets.com/forex-trading/trading-conditions/swap-rates/) what happens in the situation that the swap rates are very volatile and change a lot throughout the year. Have you taken this posibility into account when calculating if the accumulated swap will offset any potential loss? What if the swap changes and become negative in a couple of months?

Good luck and good trades.

 

[LoRio]

Whats up Brother ? How is it going ?

 

[Joh]

Hi Rahman ,

Thank you for your posts, really enjoy reading them. I am also a long term trader although not successful like you. For me it seems to drag on 'for ever'! Especially my E/Y's since 2012 and Au/U's since it August 2013 sigh!. Am now most concerned about the sharp trend change in the A/U and have serious doubts that this was smart idea re this curr. pair .

Took a different tack in the month of May this year with the U/ZAR, took 0.02 positions in the 103 area they have paid good swaps but am logically negative which i expected. Got into some 104 and 105 which i closed with a profit. Then added further small trades from early September 106 and 107 area keeping at least 150p gap in between trades -then noticed the latter trades are being paid far less swap -

The U/Zar now has gone to 113 area and again i can now see this may take much longer then anticipated it could take a very long time before this pair re -visits that 103-106 area . My question what do you see as an appropriate time to wait in a scenario like this?

I do not mind waiting a couple of years but these A/U's trades i now think could years more as long as swap is paid. But am worried as in the past to my horror the curr. pair swap changed from positive to negative (IBFX now closed) as the trend changed. I heard that is not the norm is that correct?

Thank you Rahman pls keep posting your posts.

 

[Joh]

Please be very careful

Not everybody knows that the brokers can change their swap rates when they want to. IMHO (in my humble opinion) this need to be noted.

A local well known broker here in Australia changed the rate from positive to negative on the U/ZAR overnight. I write this to warn you, if you intend to try out this system or you have 5 or 6 or more trades running, banking on the swaps, at the same time going deeper into the red your risk is growing daily. It is happening to me now (and btw it has happened in the past with the EU not an exotic trade) caution is the key.