Why trade forex
Many forex traders use a host of resources to inform and guide their trading decisions. Participating in the markets requires more than just opening and closing trades on a whim. A lot of research and practice are required to improve your approach as the market is everchanging and evolving.
If you’ve completed all our introductory courses on trading forex markets, this course aims to introduce you to more advanced concepts. You’ll discover how to trade around different forex market trading times, how to use breakout and range trading strategies and more.
Understanding forex rollover15 min
Using the currency carry trade strategies10 min
Types of forex analysis10 min
Trading the 24-hour forex market7 min
Trading the London session6 min
Trading the New York session6 min
Trading the Tokyo session5 min
Navigating closed markets on weekends5 min
Example lesson: Using the currency carry trade
We’ve already explored the idea of carry trades in the previous lesson. The concept is simple enough: traders use this technique in an attempt to profit from the interest rate differential – which you may now know is called ‘rollover.’
This lesson will explain FX carry trades further through examples. We’ll also explore popular carry trade strategies and how you can try to incorporate them into your trading plan.
What’s a currency carry trade and how does it work?
A carry trade involves borrowing a currency in a country that has a low interest rate (low yield) to fund the purchase of a currency in a country that has a high interest rate (high yield).
The idea behind it is to hold such positions overnight in the hope that an interest payment will be made to you based on the ’positive carry’ of the trade.
The lower yielding currency is referred to as the ’funding currency’ while the currency with the higher yield is referred to as the ’target currency.’