Forex Trust Club present the Swap Hunter indicator.
Get paid interest by our selected brokerages for hedging correlated assets using our Swap Hunter indicator that identifies profitable overnight swap rate differentials.
Swap Hunter is an indicator that involves identifying assets offering a relatively low swap (or interest rate) and a currency pair offering a relatively high swap (or interest rate). This allows you to hedge your risk exposure to the markets.
e.g. Buy one and Sell the other if positively correlated and Buy or Sell simultaneously if inversely correlated. You will then receive a net swap(the differential) every night from the brokerage without risking too much.
As long a there are no major fundamental events that may affect one of the asset pairs, this is a very clever way to lower your risk and generate steady profits, slowly but surely.
The main goal of Forex carry traders is to capitalise on the the swap/interest rate differential between two currency pairs which can be substantial, depending on the rate of capital leverage or trade size you use.
Do not take us wrong, we did not invent swap/carry trading. We just developed the indicator that spots and identifies the best assets with the highest paying swap’s/carry trade differentials. Plus we have contracts with the brokerages that offer the highest swaps.
The Overnight Rate
Carry traders are paid an interest rate differential each and every day of the year exactly at midnight.
This interest rate differential is called a Rollover Rate or Overnight Rate or Swap Rate. On Wednesday, this Overnight Rate is tripled (x3) in order to cover the missed rates of Saturday and Sunday.
Popular Carry Trade Forex Pairs
The New Zealand Dollar and Australian Dollar offer the highest interest rate yields and the Japanese Yen and Swiss Franc the lowest interest rate yields. That is why Forex pairs such as AUD/JPY or NZD/JPY are some of the most traded pairs by Forex carry traders.
How to Calculate Swap/Interest Rate Earnings
The daily interest for each and every Forex currency is calculated as follows:
■ (Interest Rate of the Long Currency – Interest Rate of the Short Currency) X Position Size
For a long position of NZD/USD of 5 standard lots here is the calculation of daily earnings:
■ (.0250 – 0.005) x 100,000 x 5 = 10,000 USD / 365
Approximately that means $27.39 every single day or approximately $10,000 per year.
Of course you can scale these figures up or down depending on your equity level and risk appetite/profile.
Note, brokerages may use slightly different overnight rates.
But as mentioned earlier we have carefully selected and partnered with the right brokerages that pay relatively higher swap rates.
We are happy to provide you with the Swap Hunter Indicator upon registering your details on our website and opening an account with one of our recommended brokerages.
We would also love to show you exactly how it works in real-time and how to install and use it effectively.