The three classic forex trading strategies have been winners this year
The three traditional ways to trade currencies are:
- The carry trade
- Trend following
- Purchasing power parity/valuation
Bloomberg reports that all three are winners so far in 2016. If that continues through year-end it will be only the second time in the past decade that all three have worked.
They say the momentum trade has yielded 3% this year, the G10 carry trade has paid 5.8% and buying the undervalued Japanese yen has been the biggest winner.
The last time all three strategies worked in the same year was 2014. Prior to that they hadn't worked together since 2004.
I'm not sure how they have come up with some of these metrics but it's an interesting take.
