How Does The Carry Trade Work?

How Does The Carry Trade Work?
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  1. Currency carry trade is one of the most popular trading strategies in the forex market and they can be risky since they are often highly leveraged and over-crowded. Although its mechanism is easy theoretically and can be explained like this. Firstly, you need to borrow currency that has lower interest rate and then use that money for buying currency which has higher interest rate. The profit you get is the difference in between this trading.

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