“Interest Rate Differentials is a differential measuring the gap in interest rates between two similar interest-bearing assets.”

Currency Traders use interest rate differentials when pricing forward exchange rates.
Different currencies pay different interest rates. This is one of the main driving forces behind foreign exchange trends.
It is inherently attractive to be a buyer of a currency that pays a high interest rate while being short a currency that has a low interest rate.

Although such interest rate differentials may not appear very large, they are of great significance in a highly leveraged position
Based on the interest rate parity, a trader can create an expectation of the future exchange rate between two currencies and set the premium (or discount) on the current market exchange rate futures contracts.
Simple Example of Interest Rate Differentials:
An interest rate differential is the difference in interest rate between two currencies in a pair. For example If one currency has an interest rate of 4.5 percent an the other has an interest rate of 1.5 percent, it has a 3 percent interest rate differential.
If we were to buy the currency that pays 4.5 percent against the currency the pays 1.5 percent, we would expect to be paid on the difference with daily interest payments.
This is known as carry trade.
Carry trade is a trading strategy used to take advantage of the interest rate differential between two currencies.
At Prolific Investments Limited we apply this trading strategy within the Prolific Forex managed Accounts Programs and the Prolific Currency Futures Managed Accounts Programs

Prolific Currency Futures Managed Accounts Programs
Prolific Currency Futures & Options Managed Account Program (PCFOMAP)
In this program we will focus on the seven majors namely: EUR,GBP,JPY,CAD,AUD,CHF and NZD.
The amount of an account’s net assets committed to margin in this Program will vary as a result of market volatility, among other reasons.
On average, three percent (3%) to forty percent (40%) of net assets of an account will be committed to margin.
Our risk per trade will be between 2% - 5% of free Equity. The period used to execute trades varies from 30 minutes to the daily chart.
The length of the trades will depend on the stop loss settings and the target profit. On average the length of trades should be between five days and one month.
The minimum initial account requires a deposit of $25,000.00

We apply the carry trade strategy within the Prolific Aggressive Forex Managed Accounts Programs.

Prolific Aggressive Forex Managed Accounts
Prolific aggressive forex managed account program (pafmap) utilizes a higher degree of leverage (100:1) with five (5) different trading techniques: trend following, breakout trading, range trading, momentum trading and dynamic carry.
The majority of the trades generated by this program uses short-term time frame. This is a high frequency trading program (hftp).
High frequency trading program (hftp) means that the numbers of trades per month range from 20 to 50.
The amount of an account’s net assets committed to margin in this program will vary as a result of market volatility, among other reasons. On average, 10% to 20% of net assets of an account will be committed to margin.
Percent allocation is the method used to determine the allocation of trades among customer accounts.
Percent allocation refers to the percent of equity that a sub-account holds relative to the whole portfolio. In percent allocation mode, a sub-account with an equity balance of $20,000 would receive 20% of all master account trades if the portfolio equity of all sub-accounts were $100,000.
The minimum initial account requires a deposit of $25,000.00
Carry trade strategy is simply buying currencies that pay interest. This is a very simple strategy that can be painful if not done correctly

This article is written by Prolific Investments Limited
Prolific Investments Limited offers forex managed accounts,futures managed accounts,options managed accounts and securities futures managed accounts.Prolific Investments Limited is registered with the Commodity Futures Trading Commission (CFTC) as a Commodity Trading Advisor (CTA) and Commodity Pool Operator (CPO) and is a member of the National Futures Association (NFA).
**Forex, Futures and Commodities trading involves substantial risk of loss and is not suitable for all investors.

U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. Click here to continue reading

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The Eurozone decide to surrendering its responsibility to the International Monetary Fund(IMF) is like death in the family.
This will have seriuos implications for the euro. I am sure Mr. Jean-Claude Tricket understands the market implications.
If my analysis is correct, it is possible for the euro to reach par with the dollar.
Let us have a look at the technical analysis for this pair.

Prolificinvestment.com

This commentary is provided by Prolific Investments Limited
Prolific Investments Limited offers forex managed accounts,futures managed accounts,options managed accounts and securities futures managed accounts.Prolific Investments Limited is registered with the Commodity Futures Trading Commission (CFTC) as a Commodity Trading Advisor (CTA) and Commodity Pool Operator (CPO) and is a member of the National Futures Association (NFA).
**Forex, Futures and Commodities trading involves substantial risk of loss and is not suitable for all investors.

U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. Click here to continue reading

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Prolificinvestment.com

Welcome to Forex Managed Accounts: EUR/USD and GBP/USD Daily Review for today March 22, 2010.
This review is provided by t Prolific Investments Limited

Prolific Investments Limited offers forex managed accounts,futures managed accounts,options managed accounts and securities futures managed accounts.Prolific Investments Limited is registered with the Commodity Futures Trading Commission (CFTC) as a Commodity Trading Advisor (CTA) and Commodity Pool Operator (CPO) and is a member of the National Futures Association (NFA).
**Forex, Futures and Commodities trading involves substantial risk of loss and is not suitable for all investors.

U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. Click here to continue reading

**Forex, Futures and Commodities trading involves substantial risk of loss and is not suitable for all investors.

U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. Click here to continue reading

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Prolificinvestment.com

Welcome to our Managed Forex Accounts Trading Plan for the next trade cycle.
This trading plan will used for our Forex Managed Accounts Programs at Prolific Investments Limited namely: