LitheInvestments'  Instablog

Do Carry Trades Still Exist In This Market? Long gone are the days of the 8%+ Yields offered by the New Zealand Kiwi, but lithe traders and investors can still find ways to benefit from positive swap. With the Aussie rate coming out in just over an hour we have to wonder where is the opportunity for carry trading and swap gains in the FX markets?

I've stated this a few times now, the Euro's positive swap against the Swiss currency floor isn't bad and has fairly minute risk with a stop loss somewhere in the 1.19 area of the EURCHF currency pair..Right now you can yield about 2 pips a week from this pair and exponential compounding gains with the Oanda broker.

While this artificial play can't last forever it's hard to ignore the current opportunity presented. The Aussie is fairly unstable with poor news coming out and rate cuts predicted..

EURCHF is the name of the game right now..If you've found opportunity with swap gains in any of the currency pairs outside of the Aussie and EURCHF please share your thoughts in the comments below.

Good luck trading out there.

What Leverage Is Appropriate For Forex? You've probably heard about the generous leverage Forex allows..and how it more often than not ends up being a double edged sword for new traders. Brokers in the USA offer up to 50:1 leverage, while other countries can offer up to 1000:1.

For most traders they will not need to use more than 20:1 leverage, but in some situations more leverage can come in handy. For example, with the current SNB floor heavy leverage may be a good take right now for the EURCHF.

With proper money management on a decent sized account 10:1 is a good leverage level to use for day and swing trading. Keep in mind the more leverage you use the more you give away to commissions.

SNB will do everything in their power to hold the floor. SNB's Jordan has insisted this from the get-go. I don't believe this can be compared to the Yen's failed intervention attempts or previous failed SNB intervention attempts. This floor, peg, intervention whatever you want to call it has been extremely expensive for the SNB. They'll commit billions to this and may be able to hold this floor strong for many months to come..We'll have to keep checking with the balance sheet and see where it's at every week or so.

Good luck trading out there.