Cap's Trading Diary

[Capitalist]

I got out of the AUD/JPY carry trade that you're talking about about a month ago when the trend started breaking down. I haven't been trading in August because the institutional traders are gone in the summer.

I have found that the money on interest rate trades is really made and lost on the price movements; the interest payments are only a small percentage of the overall P/L. Out of all the money I made on the long AUD/JPY position while I had it, only about 10% of my profit was from interest payments. The other 90% was from the price appreciation.