Risk Reward for Carry Trade
Greeting all,
I've a question regarding the risk reward ratio for carry trades. In my normal FX trades I attempt to use risk benefit ratio of at least 1:1 with regard to pips. My question is should I do so for my carry trades also? By way of instance, would it be wise to risk $1000 to obtain $700 in interest at a year's time. My stop loss would be set into a place where I would lose $1000 if my carry trade is stopped out. Is it wise to even use a stop loss in carry trades?
And it looks like the possibility of my profit could be much more if I held that the trade for longer, say two or even three years. This would affect my risk reward ratio.
