What if I told you that you could actually make money on a currency that just happens to stay at the same value for a long period of time? You’d probably think I’m crazy, but the truth is that you can use a currency carry trade to profit in this scenario. I want to add first that such a trade is going to appear to fall out of the range of “forex trading”, but this is all about currency and making money. I hope you’re not objecting to your ability to make more money because I’m sure not.

The process is a very simple to understand. Let’s say the the price of the currency will remain the same value over the year. Let’s say you could get a real cheap loan from someone. Maybe you have a 0% interest for the first year on your credit card or you have money you can borrow from your friend at 1% a year. You could very well take that money, turn it into the currency that remains the same and invest it into their bonds that pay 5% a year. Obviously if you’re paying 1% interest on your loan, than you’re making 4% profit a year for doing nothing more than carrying a currency. Hence why they call it a currency carry trade.

This may seem a little ideal. You’re probably thinking “How the hell do I get a low interest loan like that? No banks offer that. My credit card charges 18% interest.” Maybe you haven’t realized it yet, but your broker does margin trading with you. Meaning you put up some cash and they put up a lot of cash for just about 1-2% of your return. That’s cheap money and that is what you should be using.

As you can see, doing a currency carry trade is definitely a profitable thing to do. It will help branch you out of the whole simple minded thinking of most forex traders. As usual, this post is brought to you by Forex Killer. Check it out because it will help your profits.