Swap trading, or simply ‘the carry trade’ as it is called, is the strategy of simply buying a high interest-rate currency against a low interest-rate currency and holding the position for what is usually a long period of time. Forex brokers will pay traders the interest rate difference, or ‘swap’, between the two currencies for each day the position is held. The trick here is that higher-yielding currencies are susceptible to large sell-offs if the market loses risk appetite since these currencies are generally considered riskier than safe-haven currencies like the U.S. dollar or Japanese yen, so it’s a good idea to trail your stop loss up to lock in profit as the carry trade moves in your favor.