Polish zloty to yen monthly strategy: how much profit can be earned by trades aiming for swap points — [Relaxed Forex]
This article is a reprint and revised edition of FX攻略.com June 2019 issue. Please note that the market information written in the main text may differ from the current market.
Profile of Yuttari Kanose
Yuttari Kawase. Individual investor. A “Yuttari Trade” trader with very few trading occasions. Daily study with the aim of achieving great success in FX. Holds accounts with various FX companies and is familiar with a variety of services within the industry.
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Last time, we checked whether it is possible to trade long-term using the South African rand/yen cross rate (ZAR/JPY) to target long-term swap points. The conclusion was largely possible, but two risks related to emerging market currency pairs require attention. One is the risk of a yen appreciation trend in the exchange rate, and the other is the risk of market disappearance during major upheavals.
Therefore, this time we consider a currency pair that is not a major currency pair, but has relatively stable historical exchange rates and a reasonably large swap point. The pair is the Polish zloty/yen (Zloty/JPY; hereafter Zloty/JPY). We consider receiving swap points for a long period in Zloty/JPY. Will we reach a good conclusion?
Long-term chart of Zloty/JPY
First, let's check the long-term chart of Zloty/JPY. Since 2008, you can trade Zloty/JPY with “Click 365.” Therefore, data from Click 365 is cited (Chart ①).
Looking at the chart, it is my favorite pattern. In other words, it has become a long-term range. A long-term range means you should buy when prices are low. This makes trading policy easy to decide.
Also, when the exchange rate, which had been yen-deficient, reaches the red line, it tends to rebound and rise for some reason. Therefore, if the exchange rate falls to the upper red line, buy a little and wait for a rebound. If it breaks downward, buy a little at the lower red line and wait for another rebound.
In both cases, the key is “buy a little.” When trading on a long-term chart, even small trades can lead to large gains or losses. Looking at the chart, the scale marks every 5 yen. Five yen equals 500 sen. Compared with daily or intraday charts, the spacing of the scale is significantly larger, so it is important to trade little by little.
Incidentally, the exchange rate at the lower red line was realized as early as the 2000s. It was the historical bottom that could not be reached even during the 2008 Lehman Shock. When trading on a long-term chart, it is good to be strongly aware of numbers in the early 20-yen range.
