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Carry Trade Strategy | Complete guide to this strategy

What is and how to trade Forex with the Carry Trade strategy ? In this guide we will offer all the answers to clarify this generalized investment methodology.

⭐️ Strategy

Carry Trade

? Suitable currency pairs

Jpy / Usd – Aud / Jpy – Nzd / Jpy

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⌚ Time horizon

Long period

? Timeframe

D1 – W1

? Initial capital

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200 €

Let’s make it clear up front that this is a valid long-term strategy and one that professional investors often use. However, with some useful tricks, it will be possible to put it into practice even if we are beginners.

In addition, taking advantage of financial leverage , a small initial capital (such as € 200) will be enough to invest with Carry Trade.

What is Carry Trade?

Carry Trade is defined as an investment methodology that consists of borrowing a currency with low interest rates and then investing in financial instruments based on a different currency, with higher rates.

The difference between the two interest rates will represent our net profit.

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It may seem like a long and complex procedure, especially if we think that until a few years ago to carry out these exchange operations you had to go to the bank, ask for the desired currency and carry out subsequent operations by phone.

Today, thanks to online brokers, all these processes are carried out online, with high security standards for the investor.

How does Carry Trade work?

We define the operation of the forex strategy called Carry Trade with a series of points.

1. Borrow money

Currencies with low interest rates should be selected. An example? Japan (Yen) for years has experienced a phase of deflation with exchange rates below 2%. Therefore, it was cheap to buy Japanese yen. To simplify the calculation, we assume a borrowing rate of 1%.

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2. Invest in assets with different currencies

Now that we have our yen, we can, for example, decide to invest in US government bonds. Generally these transactions are carried out on stable and secure financial instruments, like bonds.

On average, a medium-term Bond USA yields 3% (credit rate 3%).

3. Wait for the deadline

At the end of the year, we have a deposit rate of 1% and a lending rate of 3%. This means that when the Bond returns our 3%, with the money received we will pay the rate on the Yen and we will have a net 2% left: this will be our profit!

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Obviously, we can identify other states with low borrowing rates and invest in other financial instruments, as long as we keep the risk low and have a good spread between the borrower / lender rate.

What are the risks of the carry trade?

As we have guessed, the Carry Trade if used well is a true arbitrage in the financial markets. However, especially for an inexperienced investor, the dangers are different.

The main risk associated with Carry Trade is linked to fluctuations between interest rates, which therefore run the risk of canceling our profits or even sending our account at a loss.

Another consideration to take into account with respect to risks refers to the capital to be used . A large amount of capital is required for this type of investment. The difference between interest rates is minimal, so thousands of euros are needed to have a decent return at the end of the investment.

However, through Forex Trading , it will be possible to minimize risks and above all use accessible initial capital, let’s see how to do it in the next paragraph.

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How to trade with Carry Trade

Let’s see now how to apply this methodology within online trading.

When we open our platform, selecting a currency pair we will see that there will be an entry: SWAP .

The Swap indicates the commission (positive or negative) that you pay in a currency. Since Forex is traded in pairs, there will be a Swap in the case of a Sell and one in the case of a Buy .

In this case, the scenario in the Aud / Jpy exchange is twofold:

  • Sell: When opening a sell position, we will pay more than $ 4 in commission every day
  • Buy: when opening a buy position, we will receive € 1.40 every day.

This means that a long position in AUD / JPY held open for 10 days will guarantee a profit of € 14. In addition, of course, to the benefits of the market.

Therefore, Carry Trade Forex trading means selecting positive swap currency pairs and opening the corresponding positions.

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Beware of risks: in particular, the swap is variable and therefore you can end up in negative territory. In addition, we suggest opening cross positions with a well-defined trend.

Best Carry Trade brokers

If we decide to invest with the Carry Trade strategy, we must choose a reliable Forex Broker , with a large number of negotiable currencies and with advantageous conditions in terms of Swaps and spreads.

The best solution is undoubtedly eToro , a platform of great fame and with dozens of tradable currencies. Its interface is very intuitive and allows you to invest even from a smartphone.

Spreads, even on exotic pairs, are competitive and many traders choose to try Carry Trade on eToro , perhaps starting from a demo account.

If we want useful tips and suggestions, we can always count on the Broker Community . A virtual meeting place where hundreds of investors exchange ideas and opinions every day.

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Ultimately, we recommend eToro for a profitable carry trade.

Open a Forex account on eToro here

Final notes

In this guide, from Inversiones24 we have explained in detail what Carry Trade is and, above all, how to use it to invest within an online trading platform.

We suggest always starting with a demo account, to familiarize yourself with the rules that determine the Swap and all the other concepts of the Carry Trade.

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Traditional Finance

How to invest in Cetes: investment guide

Many people wonder how to invest in Cetes . It is a frequently asked question, especially because it is a very popular type of investment that has spread since the 70s of the last century in Mexico.

The Cetes is the nickname by which the Treasury Certificates issued by Banco de México are known. It is one of the oldest debt instruments on the continent. Their first issue dates from 1978 and they have become a first-rate financial tool for investors and savers in the country.

Throughout the article we will analyze what these certificates are, how they work and how to invest in them. But also, we will analyze other options and alternatives.

However, first, before investing in any type of asset or financial product, it is important to clarify the following issues:

  1. The money available for investment
  2. The investment tool through which you want to place the money
  3. The broker or platform through which the operation will be carried out

In this guide, in addition to analyzing how to invest in Cetes, we will provide you with some ideas about alternatives to investment and tools such as regulated trading platforms, with which to invest safely.

How to invest in Cetes: what are they

Before considering how to invest in Cetes, it is important that you know what these investment instruments are and how they work.

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It is a tool that we could define as similar to a promissory note. The issuance is made through the Ministry of Finance and Public Credit. The user can buy these emissions. The purchase is offered at a discount and when they are withdrawn the face value is equivalent to 10 Mexican pesos. It is in the difference between the discount and the withdrawal value where the benefit is obtained.

It is important to take into account the previous data since the performance will be different depending on the days of issuance and the discount obtained in the acquisition.

It is not a type of investment that maintains a single profile since there are different issuance terms. From 28-day issues to 91 days, 182 days or 364 days. Performance can also vary significantly from one type of issue to another.

Among the different savings options, this is considered one of the most reliable and with the best access since, on the one hand, the issuance is carried out by Banxico with the backing of the federal government, and, on the other hand, they are accessible from small amounts of money (100 Mexican pesos).

Therefore, if we had to make a summary of the characteristics of the Cetes it would be the following:

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  1. It is a low risk investment
  2. Has generally outperformed inflation
  3. It is easily accessible and requires a lot of money to invest
  4. It has the backing of the country’s government and is issued by the Bank of Mexico
  5. Main features

How to invest in Cetes: how they work

The first thing we must understand is that Cetes are an instrument that is considered highly liquid . This is important if one takes into account that the profitability they offer is not excessively high compared to other products, but it provides the flexibility of greater liquidity than, for example, bank deposits.

Issues are usually made quarterly, and are made in the form of a calendar of amounts and terms of cetes at auction. It should be noted that it is an instrument with many requests that, on the other hand, is considered as a reference rate in the market: many financing tools are based precisely on the cetes rate.

The operation of the Cetes in terms of profitability has a lot to do with the development of the country’s economy itself. In times of economic deficit, generally profitability will tend to be lower.

In short, we could understand it as a fixed income issue, initially very much like the investment in bonds , but with its particularities that have to do mainly with the issuance model and easy access from small amounts of money.

Advantages and disadvantages of Cetes

Before considering how to invest in Cetes, even if it is an uncomfortable family instrument, it is important that you assess the advantages and disadvantages they present.

Among the main advantages we can highlight:

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  1. Accessible from little money
  2. Liquidity since they can be sold and bought daily in the secondary market
  3. Wide variety of possibilities with short, medium and long term maturities
  4. Security as it is a financial tool issued with the support of the federal government

Obviously, not all are advantages, some of the disadvantages to take into account of the Cetes are:

  1. High demand at times of highest profitability of issues
  2. Fixed income risk in relation to the evolution of inflation
  3. Low profitability compared to other investment instruments
  4. They depend on the state of the economy to improve performance

More profitable alternatives to Cetes: ETF

Obviously there is no single alternative to Cetes as an investment. In fact, we could consider any investment product as an alternative. However, we are going to look at the alternative that ETFs represent , and, more specifically, when we trade them through the best Trading platforms on the market.

The ETF is seen as a model of investment very close in concept to traditional mutual funds, but with characteristics that differ significantly:

  1. They are administered with a passive management model
  2. They behave like stocks trading on the market (hence the definition of exchange traded funds)
  3. They cover all market models, not just fixed or variable income, reaching different geographical environments, sectors, etc.

ETFs have been considered as one of the future models of the stock market, and in general of Trading operations. In recent years, it has proven to be a high-profitability tool that presents lower risk than other similar investment models. In addition, it can be operated in a simple and comfortable way both in person and through the Internet on the best investment platforms .

Therefore, it represents an investment that is more profitable than other products such as bank deposits or savings accounts, and at the same time cheaper than investment funds.

There are several ways to operate ETFs, one of them is to do it through regulated and reliable trading platforms such as eToro.

eToro is one of the oldest, safest and most reliable brokers on the market. Throughout more than a decade of existence, it has managed to win the trust of millions of investors around the world. It is a safe and secure broker that in Spain is also registered with the CNMV.

Among the most outstanding features of this broker are:

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  1. Very competitive low spreads
  2. Many assets to invest, from stocks to cryptocurrencies , currencies, etc.
  3. A proprietary automated investment system called Copy Trading.
  4. A demo account without functionality limitation to operate with virtual money for free
  5. Access to cooperatives with real money from a minimum deposit of € 200

eToro operates on its own platform, it is a very accessible and affordable environment for any user profile, where novices and veterans can operate with complete peace of mind.

Copy Trading is an automated system that allows you to invest by copying the investments of professional traders. It is a highly appreciated formula for investing in automatic mode. It offers the possibility of trying to obtain profitability like a professional without being one, copying the strategies of true professionals.

eToro also offers a free demo account. This account facilitates access to all the functions of the platform including copy trading. The cooperative is carried out with virtual money, without assuming any risk. This helps both to know the platform and to improve our level of Trading.

conclusion

When asked about how to invest in Cetes , we have been able to show the reader some key aspects of this type of safe and profitable investment .

On the one hand, we have verified that it is a product issued by Banco de México backed by the federal government. It is a debt investment model that offers very diverse options from the short term to the medium term. Emissions can be found in both days and up to two years.

It is a very popular investment formula that takes advantage of a slightly higher return than other savings or fixed income products, together with great liquidity and flexibility unlike other products such as bank deposits.

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We have also reviewed alternatives to investing with Cetes , specifically the alternative represented by ETFs. It is an investment formula that, based on a primary concept similar to that of investment funds, leads us to invest in a formula that behaves like a share listed on the markets.

It is one of the investment formulas that has offered the most profitability in recent years. Also, a tool that has established a risk / return ratio that is more appropriate for the investor than other similar models.

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ForexTB: complete guide on this trading platform

In this guide we will analyze all the keys that make ForexTB one of the best online brokers in Europe.

Throughout the guide we will review the main characteristics of the platform, as well as the advantages it offers to users and that have made this broker one of the favorites of the

With a high-level platform, high-quality customer service and a very beginner-friendly approach, ForexTB is a broker with all the credentials to be considered among the best in the world.

Why choose ForexTB to trade online? We will try to answer throughout the guide so that you can make a good composition of place on this trading platform.

How to open an account on ForexTB

Opening an account at ForexTB is really easy, and in fact, opening an initial account doesn’t even require a deposit. Registration is free, yes, to start operating it will be necessary to make a minimum deposit.

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The three initial steps to opening an account and starting real money trading are:

  • Check in
  • Provide the data required by Midfid
  • Make a deposit
  • Start trading

Registering is very easy, just click here to enter the platform and complete the form with your personal information. It will take only a few minutes and all data is guaranteed by European privacy regulations.

Keep in mind that it is necessary to provide the following information:

  • Identification card
  • Proof of residence

The first must be provided with a scan of our identification (DNI), the second can be justified through the copy of a direct debit invoice.

Subsequently, the Mifid questionnaire must be completed , something that is brokers practice for all regulated brokers at European level. There are questions to assess balance and financial awareness, all with the goal of protecting and safeguarding the client.

The questionnaire also serves to divide customers retail and professional clients .

Finally, after receiving the authorization, it will be possible to deposit safely from € 250.

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Alternatively, simply click on use the Demo and start performing operations with no functionality limit but with virtual money, that is, without any risk.

Regulation

The first strength of ForexTB is its regulation. The platform has the CySec license granted by the aforementioned Cypriot regulatory authority. Therefore, this Broker can operate without problems throughout Europe as it complies with the Mifid Directives.

What is Midfid: for some years now, the European Union has drawn up a series of investment regulations. These are very strict rules that every operator must comply with in order to offer their investment services. It follows that obtaining licenses from entities such as CySec is not easy and guarantees compliance with current legislation.

ForexTB has managed to obtain the license because it complies with all the rules and conditions imposed by the EU and with the registration number 272/15 it is in a position to operate throughout Europe offering its clients maximum security.

Therefore, one of the first obvious keys is that ForexTB is not a scam or a dubious platform, but one of the best brokers out there.

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Types of trading account on ForexTB

ForexTB is a reliable broker that allows different types of accounts to start trading. The minimum deposit is only € 250 and payment can be made by credit card, bank transfer or paypal.

Obviously we refer to regulated brokers, we do not care if the platform without any license allows even smaller deposits. Our recommendation is always to choose reliable and safe operators.

In this context, the figure of € 250 is considered excellent to really start investing in the markets, with professionalism and security.

In addition to the basic account, there are three other types of accounts, with increasingly professional and exclusive services:

  • Low spreads
  • Dedicated account manager
  • Advanced training material

These are just some of the advantages that ForexTB makes available to its clients.

Training offer

One of the great advantages that ForexTB offers to its clients with less is access to a really extensive and well-maintained section dedicated to training. From the home page you can access a long series of training articles and there is also a section dedicated to e-books.

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The training material is written entirely by professionals and the quality is tangible: fluent writing, concepts expressed clearly and markedly practical, aimed at teaching users to operate in the markets.

Specifically, there are 11 Ebooks available for free , through which to train from the base to the learning of complex technical concepts.

Even the most experienced will find it helpful to review some key concepts from these e-books, which can also be downloaded in the mobile app .

Here are all the e-books that ForexTB offers:

  • Advanced strategies
  • Strategies for beginners
  • Advanced technical analysis
  • Basic technical analysis
  • Capital management
  • Business psychology
  • Trading starting from CFD
  • Market analysis
  • Glossary
  • Terminology
  • Forex market

Without a doubt, a perfect solution to start studying the financial markets on high-quality content.

Trading signals

If the ForexTB training offering is more suitable for beginners, trading signals are also an essential tool for finance professionals.

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They are indicators that come to us in real time, and that contain information on where and how to invest.

How is this possible? ForexTB Broker has partnered with a well-known analysis center around the world: Trading Central . Thanks to this agreement, expert analysts study the market with all the tools at their disposal (algorithms, software, etc.) and send trading instructions to ForexTB clients.

Everything happens in real time and at no cost to the client. This service is of the highest quality and with a very high success rate.

What assets can be traded on ForexTB?

To operate in this Broker there are many options to choose from. In ForexTB, the Assets available are numerous and with a wide number of categories:

  • Forex
  • Actions
  • Indices
  • Raw material
  • Cryptocurrencies

A wide offer that allows you to invest in any market with contracts for difference. We are talking about certified financial instruments that allow you to invest by replicating the performance of the asset, but without buying it, speculating on its evolution.

In this way, it is possible to open a position up (Buy) or down (Sell) and win in both cases.

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Basically, it will be enough to make the right forecast on the asset and choose the corresponding CFD: an excellent opportunity to make money in any market.

Demo account

All the features and assets that we have reviewed can be used in a demo account , using virtual money for practice. A perfect way to learn to invest without risk of loss and in a protected environment.

The Demo can be activated at the end of the registration, you do not need to pay anything and you will find all the conditions of the Broker:

  • Real-time graphics
  • Assets available
  • Technical indicators

Conclusions

The ForexTB Trading platform is one of the best platforms on the market to invest in the financial markets in a professional way and with total security, both through your computer and mobile devices.

With the CySec guarantee and the Metatrader platform for investing, ForexTB also offers an excellent trading signals service for more tools when making decisions and trading CFDs to choose to win even in the event of a recession.

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Investous: complete guide to this online broker, how to invest

Investous is one of the trading platforms that has experienced the greatest growth in recent years. As we will see throughout the guide, this is due to a mix between the good services that the platform offers, the security it provides and the tools that make more and more users satisfied with the service of this broker.

Throughout the guide we are going to analyze in as much detail as possible all the main features of this broker. We will discover its main advantages and strengths, as well as some characteristics that differentiate it from other offers.

It should be borne in mind that there are many relevant issues in this analysis. From presenting really competitive spreads to being able to operate both on a web platform and on Metatrader and, of course, the fact of being regulated by the Cypriot regulatory authority ( CySec ).

All these elements make up a safe, reliable broker, and with many value-added tools for the user. We will analyze all these elements and some more for the reader throughout the guide in order to have valuable tools when choosing this broker for your operations.

Investous: how it works

Investous is a trading platform that, in addition to security, provides great convenience. The operation is characterized by having a simple access, and by a very friendly interface with the investor. Simple and comfortable. In addition, as we have indicated, it is also possible to trade with Metatrader.

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From the very presentation of the page we find some areas that are the definitive ones to try to understand how to operate with the broker, highlighting:

  • CFD trading operation
  • Training and qualification
  • Account types

There are other sections such as legal documentation.

Trading and CFD

From the platform’s own access page it is possible to start the session and access the account. Those who wish to operate directly from the platform access from the operational section enabled for this purpose.

The platform, after accessing, leads us to a private area that offers us the possibility of not only viewing our account, resources, etc. but also begin to study the different assets that we can access to invest. We remember that it is a Training platform with a large number of assets.

Also very useful is the CFD section , which explains in detail the operation of these financial instruments and their use. It is always advisable, especially for younger traders, to take a look at this section before launching into the actual trading phase.

Training

Trading platforms generally offer training and education spaces. This is because the democratization of investment has brought together many people who do not yet have a high level of investment.

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One of the outstanding characteristics of this broker is, precisely, to offer a very complete space for education and training with at least four large areas:

  • Glossary
  • Technical analysis
  • Fundamental analysis
  • VOD

The Glossary is an extremely useful tool as it actually contains all the most used terms in the stock market. Beginners often get into trouble reading technical or English words. Fortunately, with the glossary it is possible to clarify doubts and operate with knowledge.

The section dedicated to fundamental and technical analysis is also very important since trading is based on these two methodologies. Therefore, there is a clear and simple guide, written in a very practical way. The reader can thus have an exhaustive image of both methodologies and choose which of the two will specialize for their operation.

VOD (video on demand)

Finally, a special mention deserves VOD. Full name: Video On Demand. In short, the platform offers a wide variety of training and training videos that can be requested and viewed.

There is a division between the Basic and Intermediate levels, in order to meet the needs of all.

In other words, these are highly curated and well-done training videos, each one dealing with a different topic. At the end of the vision, you will have a comprehensive and very practical knowledge. Thus, it will be possible to initially invest in the markets seriously and professionally.

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Demo account

As befits a good Trading platform, Investous also allows users to use a Demo account. This is a fundamental service that the best Trading platforms make available to their users for free.

There are fewer and fewer traders without a Demo account, unfortunately banking platforms are among them. On the contrary, the best specialized CFD brokers always guarantee full, free and unlimited use of the platform.

In fact, knowing the characteristics and operating secrets of a Broker at its best before choosing it for the actual trade is a necessary step. We have to check (among other things) if we like the trading platform, if the spreads are low and if the support service really works.

Investous offers all its clients a Demo account in Metatrader 4 with the same conditions as trading with real money. This aspect is very important as it allows us to really learn to operate in the markets. Years ago, demo versions offered 15-minute delayed quotes. Fortunately, things have changed today and traders like Investous demonstrate how much easier and more profitable it is to trade today than it was ten years ago.

In short, the Demo account allows you to trade with real market conditions. Therefore, it will be possible to put into practice everything learned from the different VODs or, for the more experienced ones, simply use the demo account to learn by testing your strategies.

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In a world increasingly dominated by algorithms and automated robots, it will be critical to test and program these EAs before launching them on the Live account. The Demo is the best solution to do it, without a doubt.

Trading with Investous: the types of accounts

After practicing with the demon account, it’s time to start real money trading. The fact of trading with real money means participating in the markets, and starting a career in investing with CFDs .

This career can be adjusted, from simply the search for complementary income, to those who wish to seek professionalization through investment with contracts for difference. For all of them there is a different type of account, this is the summary of the accounts offered by the platform:

Basic account

Perfect to start after a good demo practice, it offers daily customer service support and the ability to access the Trading Signals service. The spreads are competitive and start at 250 euros, which is affordable for a correct trade.

Gold Account

The most used option provides a deposit of more than 5,000 euros a figure to operate professionally. The spreads are lower and access to the reserved area of ​​the educational section is guaranteed, with tailor-made Webinars to improve operations.

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Platinum account

With spreads of less than 2 pips on each Asset, this account is reserved for professionals in the sector who are looking for a professional Broker to operate safely and with advantageous market conditions.

Vip account

Reserved for a clientele defined as professional, it offers full support and assistance services. The trader is always followed by experts and professional analysts, in order to optimize his strategy day after day.

Wide access to commercial signals (7 per day) the Vip account represents the account with the highest level of all those offered by the platform.

Register in Investous and trade from 250 euros

Investous: the partnership with Trading Central

The trading signals are an essential complement for those who want to invest with guarantees. Among the issuers of Trading signals there are some highly recommended such as Trading Central.

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It is a very famous issuer in the field of economics and finance, also known for having the best European analysts, Trading Central represent excellence in the sector. His daily analyzes are provided to the best investment banks and the best brokers.

Investous is associated with Trading Central and, above all, it is characterized by one important aspect: the Trading signals it offers to its clients are free.

In other words, Trading Central processes every day signals about market situations in which investment is considered convenient. These signals are sent in real time to the Trader, who will only have to choose between entering the market or waiting for the next signal.

Being able to trade relying on Central’s signals is really an advantage. It is a service that is generally paid and that in this case the platform offers for free. On the other hand, the profit rate of these signals is higher than 75%, well above the market average.

It is important to note that this service can also be tested on a Demo account. A perfect solution to test the effectiveness of this service.

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Conclusions

Throughout the guide we have been able to see how Investous is a safe, reliable trading platform with a large number of tools that favor the investor.

The platform, regulated through the corresponding authority in Cyprus, covers all the obligations that current regulations on marketing and financial services require. On the other hand, it is a platform that offers advantages such as:

  • Demo account
  • Different operating accounts
  • Low spreads
  • Operational safety
  • Possibility of trading with Metatrader

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