scottshubert

Yes, if you do trade an exotic currency such as the Indian Rupee, (almost no one does) make sure you only enter a profitable long term trade and only in the direction of positive interest. Typically if you are in a profitable long term trade and it lasts for several days you will be earning hundreds of PIPS which means thousands of dollars per lot traded while the interest over those several days might end up being around $25. Compared with the profit on the trade it tends to be very tiny. I have been entering long term trades for several years and the interest positive or negative is always minute in my account. Not sure what happens in other people's accounts.

Another thing to keep in mind about using correlated pairs or equities to trade is that you must know how to trade without using correlations and use the correlated pair for insight into pattern interpretations. Since they move simultaneously if the correlated pair has been moving down you would want to be looking for an exit to a short rather than an entry. Or if the correlation is inverse then you would be looking for an exit for a long position but the correlation would not tell you to enter a trade any more than looking at the equity by itself. Correlations do not necessarily tell you when to get in or out of a trade any more than looking at the equity by itself.

Gold is more or less inversely correlated with the dollar. I doubt if there is a precise calculation for its relationship with the dollar and the Euro. But the patterns are more chaotic and more difficult to trade. Trading a currency pair is much easier and produces much more profit.

A great way to see how this works is to open a demo account, place a trade, leave it running and then see how much is credited or debited from your account each day that you leave it running. It is fairly significant but not compared with the profit on a profitable trade that is running for that length of time. scott