Sunday, April 15, 2012

Exploring Carry Trade AUDJPY

Exploring carry trade of AUDJPY how the interest can made the trade a break even with the worst entry.

Let's assume the following.

Entry price = 84.00
Lowest price = 55.11

84.00 - 55.11 = 2889 pips to reach 10 years lowest. We hope that it will not reach the low of 55.11

So we need how much money to hold this trade to avoid margin call? Depending on your trade size. Let's take 1 pip = $1.00, so we need at least $2889.

How long can the interest make $2889?

I did some code in mql4 to find out. By the way, I'm using oanda so my deposit gets interest too.


   int Break_Even;


   double Interest, Units;
   double Int_Trade, Int_Deposit;
   double Entry_Price, Lowest_Price;

   Int_Trade = 3.3;
   Int_Deposit = 3.85;

   Entry_Price = 84.00;
   Lowest_Price = 55.11;

   Units = Entry_Price * 100;

   while(Interest < (Entry_Price - Lowest_Price) * 100)
   {
      Interest += Interest * Int_Deposit / 100 / 365;
      Interest += Units * Int_Trade / 100 / 365;

      Break_Even++;
   }

   Print(Break_Even + " Days");

We need 3199 days to make $2889! It is around 8 years plus.

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