Trading Basics

Carry Trade

A forex trading strategy of borrowing funds in a low-interest rate currency and buying assets in higher yielding currency.

For years this was selling Yen to buy Dollars.

An approach to trading where traders take the opposite view and therefore the position of the retail participants in a market.

The difference between the price the trader and buy at and the price they can sell at.

Also bid-offer spread. The wider the spread, the more the trader pays, reactively.

This is a measure of price performance vs a benchmark.

If a trader makes 10% per annum and the index makes 7% the trader has an alpha of 3%.

Learn the skills needed to trade the markets on our Trading for Beginners course.