ikkyu

Rising Interest in Currency Funds

Greetings,

As always, a great overview by Mr. Shaw

To throw my 2 yen into the discussion, I think the carry trade makes sense as a default position for engaging in currency markets. I don't think that is highly disputed among currency experts. Of the three major techniques for trading currencies, valuation (PPP), momentum, and carry, carry has by far the best risk-adjusted returns. Don't take my word for it though. Compare various indices:
https://index.db.com/d...

Also, carry trading really compliments a bond heavy portfolio, as there is a fairly constant negative correlation.

Cheers from Osaka,
john

Foreign Currency Trading: Can Investors Profit From Trends?

Mr. Swedroe,

Thanks for your response. If markets have a risk premium then they have an inherent uptrend. And that is what buy-and-holders are exploiting. Interestingly, risk premium is generally the explanation for why carry trading is persistent.

Cheers from osaka,
john

Yen Cross Basics

An easier rule might be: any carry trade with more than a 3% interest rate differential is going to have fat tails; if you can't handle this, stay out. There is an escalator up and an elevator down. Entering after, say a six month volatility spike, will increase your safety getting into the carry.

Cheers from Osaka,
john

Strategies for Currency Investors

nice post. I would recommend carry trading as the default strategy and maybe go from there if you are ambitious. Also OANDA is the best retail broker in my opinion. The have no minimum size trading lot, which has huge ramifications for P/L. You can make a one dollar trade if you wish. Oanda is a favorite for carry traders.

For instance, you could mirror the DBV strategy with no fund-fees just the spread. (also DBV is 2X fund).
cheers from osaka,
john

Foreign Currency Trading: Can Investors Profit From Trends?

My mistake it is published in fall 2007 Journal of Portfolio Management.

Foreign Currency Trading: Can Investors Profit From Trends?

P.S. perhaps a non-published, non-peer reviewed paper is not necessarily "evidence."

Foreign Currency Trading: Can Investors Profit From Trends?

If markets don't trend, why would you invest in anything?

ETFs Are the Easiest Option for Currency Exposure, For Now

I disagree. A good spot broker like Oanda is a much better way to gain exposure to even exotic currencies like the yuan or turkish lira. You can select your own leverage level, you receive daily credit (debit) on your carry trades, 24 access, and CFA certified.

Just my 2 yen's worth

cheers,
john

Yen Carry Trade Unwinding? Not So Fast...

My friend,

There was a major inflextion point in the yen around june 21. If counter-trend trading is your bag, so be it. No trend trader would be near this right now. I agree that waiting on japan to do anything has a "lifetime risk" (i.e. you could die before the government changes course).Ultimately, neither you nor i knows how much yen has been borrowed and where it has been put to use. My wealth increased significantly through holding yen in my paltry .8-1% savings account (vs. $).

How much upside are you talking about? You just don't see Soros blogging about macroeconomic situations....

best wishes from osaka,
john

In Euros We Trust

Why not be long yen, bunds, or gilt bonds?

Currency Trading: Profit From The World's Biggest Casino

Nice. I really like this overview.

Cheers from osaka ( where the big mac is cheap!),
john