Carry Trade Tweak

Greetings all!

Just a quick addendum to the details of the carry trade strategy I laid out in the previous post.

In that post I said that I always put buy orders below the current price and sell orders above. Actually, that’s only true when the account is showing a profit; i.e. when NAV is greater than the cash balance.

However, when the position is showing a loss, risk control considerations have priority, so the Leverage Department holds the reins. This means that when the position is in loss territory, I place sell orders below the market while trailing buy orders above the price.

In fact, this is what I’m doing in my carry account right now. As BOJ’s negative interest rate policy appears to be backfiring, the Yen has shot back up, driving my TRY/JPY position into the red. I’m reducing it as it falls, but trailing buy orders above the downtrend so I can enter at even better prices whenever the pair begins to recover.

So now that that’s cleared up, I can finally get back to my series on economics and fundamental analysis.

Until then…keep pipping up!


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