A strategy employed in currency trading, whereby an investor sells a currency with low interest rate and buys a currency with a high interest rate so as to benefit from the interest rate differential of the two currencies. Profits are usually maximised by the use of leverage.
Did you know?
The GBP/USD pair is widely referred to as “cable”. The term dates back to the 19th century, during which the exchange rate between the U.S. dollar and the British Pound was transmitted across the Atlantic via a huge cable that ran across the ocean floor and connected the two countries.
Word of the day
"Linearly Weighted Moving Average (LWMA)" - A moving average that traces the closing prices of an asset over a period of time, giving more weight to the more recent price data.
Leverage is a double-edged sword. Understand it before you use it.