Учебник по торговле NZDCHF

The NZDCHF is short for the New Zealand dollar and the Swiss Franc in the forex market. The New Zealand dollar is the base currency here, and the Swiss Franc is the second. 

Meaning that the exchange rate quoted for the pair is the amount of Swiss Franc you need to buy 1 New Zealand dollar.

For instance, if the quote states 0.6321. It means 0.6321 Swiss Franc is equal to 1 New Zealand dollar. 

The NZDCHF is a combination of one of the highest yielding commodity currencies and the safest currency in the world.

Both currencies are among the top 10 most traded currencies in the forex market, making them a highly liquid pair. Though not as liquid as the major ones, they offer adequate opportunities to expand the traders’ portfolio. 

The NZ dollar and the Swiss franc together are a minor pair. Skilled traders may find it highly profitable. Among other requirements, learning about the economies that drive these currencies is the basic for trading the pair. 

Additionally, a functional trading strategy helps the trader take full advantage of the opportunities that the NZDCHF presents.

This tutorial suggests some ways to trade the pair successfully. We include some powerful trading strategies. And also a few recommendations on the best brokers below.

Before we go into the how-to-trade part of the tutorial, it’s essential that we make you understand the economies that power both currencies. The strategies we explained below will be more evident once you gain insight into both currencies’ backdrops.

So let’s begin!

About New Zealand and Switzerland’s economies

New Zealand is a small country in the Pacific and operates an economy largely reliant on exports to its neighbor Australia, the United States, China, Japan, and countries in the European Union. Its closest neighbor and trade partner in Australia.  

Agriculture is a critical driver of this economy. The country is the third largest exporter of milk and dairy products globally.

New Zealand enjoys favorable weather, through which it generates a considerable amount of hydropower and remarkable natural gas supplies.

Recent years have seen the economy records a trade surplus after many years of scarcity of its products.

Before 1967, the country’s national currency was the New Zealand pound. The New Zealand government formed a committee to look into the decimal currency system. And in the early 1960s, the country decided on this system of currency. It dropped the pounds in 1967 and changed its national currency to the New Zealand dollar. It is endearingly called the Kiwi in the forex market, as Kiwi is New Zealand’s national symbol.

Switzerland is known as the most stable and safest economy in the world. There are other economies that are safe and stable, but this one is the investors’ all-time safest haven in times of crisis.

Investors call it the “banking capital of the world.” Its Central bank does an excellent job of regulating its economy, keeping the unemployment rate at the lowest.

Though the country hires many employees from other nations, it can nullify work permits if necessary to raise the employment of its indigenes.

Switzerland functions as one of the most advanced capitalist economies the world over, with its service sector contributing to more than half of the country’s GDP. Banking and tourism play a crucial role here.

Agricultural products, metal, watches, chemicals, and machinery are all part of the products that the country exports to the European Union and other parts of the world.

Its national currency, the Swiss franc, came into circulation in the mid 1800s. It was pegged to gold till 1945 when Switzerland joined the Brent Wood System. Then the Swiss franc was pegged to the US dollar.

The currency experienced some ups and downs, and at some point, it became pegged to the Euro. But this ended in 2015.

The Swiss Franc unpegged from the Euro and became a floating currency, and has remained so till date. Its nickname in the forex market is the Swissie.

What influences the price of the NZDCHF forex pair

Though Switzerland is not part of the EU, it has strong trade ties to the Euro zones. The same is the case with New Zealand. Therefore, crucial news releases in these regions and their other trade partners will considerably influence the exchange rate.

Both countries’ economies have the chief impact on their currencies, thereby influencing the NZDCHF exchange rate. Economic data, such as 

  • GDP 
  • Inflation
  • Trade surplus or deficits 
  • Employment and unemployment rates

Plus other economic elements will impact the exchange rate.

It is essential to note that the economies of Australia and China affect the New Zealand dollar to a great extent. These two countries are their most important trade partners.

The weather is another major influencing factor on this exchange rate as well. It determines New Zealand’s production level and exportation. The country has enjoyed a trade surplus in the last few years because its weather has been favorable. Its currency has seen some stability and appreciation due to this.

In addition to these factors, commodity prices also influence the rate. The two countries export commodities. The prices of the applicable products in the international market would affect the exchange rate.

How to trade the NZDCHF forex pair

Being a minor pair, the New Zealand dollar and the Swiss Franc crossing is not as liquid as other major pairs.

But it offers an adequate opportunity for spread betting. Many traders use positional trading strategies for the pair and make a reasonable profit.

Below, we explain the basic steps to trade the NZDCHF pair successfully:

Step #1. Research a suitable trading strategy 

As an unpopular pair, profiting from it will solely depend on a highly effective strategy. There is much information on the internet on different forex trading techniques. It is wise to study these and find one or more effective approaches that can suit the pair. Your consideration should include both countries’ economies and the factors influencing their currencies’ values. We will suggest a few functional strategies for the cross further in this tutorial. 

Step #2. Find a good broker

This crossing is a minor currency pair. Not all brokers offer it, and not all brokers offering it are ideal to trade with. First, you need to ensure the chosen broker has the NZDCHF listed among its available assets. After this, consider other factors, such as:

  1. Free demo – To allow you to test the services before investing your funds. It also lets you practice the strategies you researched before you begin.
  2. Pricing – As a minor pair with relatively low liquidity, high spreads and commission could eat into your earnings and make it pointless to trade.
  3. Support – Consider using a broker with proven excellent support service. One that responds on time, is readily available, and resolves traders’ complaints. 
  4. License – This should be your first consideration. Ensure your broker operates under a valid license from a well-known financial body. You can check this on their website and confirm it on the organization’s site. You can contact the regulatory body to be sure.
  5. Payment methods – Ease of funding and withdrawal are essential factors to look for when choosing a broker. Make sure the broker offers multiple popular methods for payment. More importantly, one or more of its payment options should be available in your region before you choose the broker. 

We recommend a few world-renowned brokers below this page.

Step #3. Test with a demo 

At this point, you have learned a few strategies in theory and have found a good broker. Take advantage of the company’s free demo to test-run your planned trading approach. You also need to test the broker’s platform and the features that come with it. If you are still new to forex trading, this will help you get familiar with the forex market environment before starting a live trade.

Step #4. Open a live trading account 

After testing with a demo, and you’re satisfied, it is time to open a live account to trade the NZDCHF pair. Fill out the form on the broker’s website to begin the process. Click on the validation link that comes to your email from the broker to continue the registration. Upload the required documents, such as ID and proof of residence, to complete the sign-up process. 

Step #5. Deposit funds in the account 

The account is only fully ready once you credit it with trading funds. Your broker should provide an easy means to do this, as we’ve explained. Usually, the broker assigns a support staff that guides the new trader in the initial stage. This consultant will offer the necessary assistance with funding the account. We recommend starting with the minimum funds if you are a new trader. Then gradually increase the investment as your understanding increases.

Step #6. Trade the NZDCHF 

The funds you send should be credited to the account in full and almost instantly. Once it appears on your balance, you can start trading. Follow these steps to trade the NZDCHF pair:

  • Click on the quote to display the list of the available forex crosses.
  • Select the NZDCHF from the list
  • Read the price. The BUY/ASK price is usually higher than the SELL/BID. The difference between both prices is the spread. It represents the broker’s fees for that transaction. 
  • Choose a position. BUY/ASK position means you expect the Kiwi to strengthen against the second currency, which is the Swiss Franc. Note that the Swissie is higher than the Kiwi. Therefore, the BUY position means you are betting that the NZDCHF exchange rate would decrease. On the other hand, the SELL trade means you speculate on the Swiss Franc to gain against the NZ dollar. That is, you expect the exchange rate to increase.
  • Exit the trade. Once the trade matures, click on CLOSE to exit your position. Note that opening and closing trades should be based on a solid trading strategy for you to make a considerable profit. We will discuss some of these strategies shortly.

The best time to trade the NZDCHF pair

Perfect timing should be matched with an effective strategy if one must succeed in forex trading.

The market is open for 24-hours, but some pairs see more action at certain times. Understanding this time and having a good trading technique will result in lots of profit for you. 

The best time to trade the NZDCHF pair is between 1 PM to 5 PM GMT. Both the London market and the New York’s are open and active at this time. Economic data would have also been released. The market will be highly active and the pair will be most liquid. This would translate to low spreads and high volume.

Strategies for trading the NZDCHF

There are opportunities to earn from this pair using long-term or short-term trading strategies. Day traders, scalpers, swing, and positional traders can find trading signals here. The basic requirements are a working technique and effective timing.

Let’s look at some strategies that are suitable for the NZDCHF:

Carry-trading

Carry trade refers to entering a position with the aim of profiting from the difference in both currencies’ interest rates. That is, the higher interest rate minus the lower equals the profit earned from carrying the trade.

This technique works by allowing the trader to borrow the Swiss franc, which has the lower interest rate. And buy the New Zealand dollar, the currency with the higher rate. This is how carry trade works. The funding currency here would be the CHF (Swiss franc), the currency being borrowed. While the carry currency is the New Zealand dollar.

The trader, in this case, expects the higher interest rate to stay the same or appreciate. If it does, they earn the difference in both interest rates, according to the size of their capital. They can also place a trade, expecting the lower interest rate to increase in relation to its pair. A positive or negative interest will accrue to the trader based on their position, referred to as a net gain or net loss. These forms of carry trade are known as Positive or negative carry trade.

Positive carry-trade strategy

When you attempt a positive carry trade on the NZDCHF, you are borrowing the CHF at low interest, and buying the New Zealand dollar at high interest. For instance, let’s assume the Reserve Bank of New Zealand has set the interest rate at 3%, and the Swiss National bank has set Switzerland’s interest rate at 0.5%. 

It means the trader will earn 2.5% interest for holding the trade. Let’s say the trader invested NZD$3000 in this transaction, it means they will gain NZD$75 as interest. Which will be credited into their trading account. 

The trader receives a net gain as they are paid the interest for holding this position. But if the trade fails, and the interest rate drops below that of the Swiss franc, the sum would be deducted from their account. 

Negative carry-trade strategy

When you use this approach, you’re doing the opposite. That means you borrow the NZD, that is, the high interest rate currency, and you buy the Swiss Franc. 

You expect the Swiss Franc interest rate to rise above that of the base currency, in this case. If this happens, you make a profit on the trade.

The negative carry-trading strategy may not be ideal for the NZDCHF. The approach is better suited to major pairs that have minute differences in the interests rate. For example, the GBP/USD could present a better opportunity to carry trade. 

It is unlikely that the Swiss Franc interest rate would increase higher than that of NZD. Therefore, negative carry-trade approach may not work here.

The positive carry-trading strategy, however, can be highly effective and profitable. The trader earns interest in addition to the profit from price movements.

Price action trading

Price action trading involves identifying patterns in the forex price charts and using these patterns to predict the next price movement.

To understand price action trading is to observe patterns in the chart and spot important indicators that affect the NZDCHF pair or the market instrument you wish to trade.

Many other approaches fall under price action, and we will discuss them shortly. Pure price action means making trading decisions based on the current price movements you see in the chart. No formulas or technicalities are involved. You simply place trades based on your instinct which arises from the moves you observe in the chart.

Price action signals are the shapes and patterns that you recognize on the chart, which help you predict the market moves.

There are two basic steps to using price action

Recognize the market conditions 

This part involves looking at the chart to determine the market conditions. A market can be in an uptrend, downtrend, or range-bound. An uptrend means prices are increasing and making new highs. This condition presents BUY or LONG trade opportunities at strategic entry points. A downtrend is a condition where the asset’s price is falling, giving traders the chance to earn on a SELL trade. In a range-bound market, there is no trend, and the market moves up and down. The trader finds the best entry points to earn from this market condition as well.

Find the trading opportunity 

The trader can only do this after they identify what condition the market is in. For instance, if the NZDCHF is in a ranging condition, the trader then looks at the price action to find opportunities here. Trading opportunities reside at the support and resistance points in a range-bound market. This is where the trader enters a LONG or SHORT trade.

Trading support and resistance with the NZDCHF pair 

The Support and resistance level can form in any market condition, including a range-bound market.

The support point is the area where the price has dropped to its lowest. The SELLERS are not willing to accept a price lower than this point. So the prices are expected to rise. Traders place a BUY trade for the NZDCHF at the support level, expecting the New Zealand dollar to gain.

The resistance point is the point where the New Zealand dollar has risen to new highs and peaked. The price would not rise any higher as BUYERS are unwilling to pay more than the new high. Traders expect the price to drop as the SELLERS take over the market. So they enter a SELL or SHORT trade on the pair. This means the CHF strengthens against the New Zealand dollar. A SELL trade means you are betting on the exchange rate to increase since the Kiwi is the base currency here. Note that the NZD is lower in value than the Swiss franc.

For example, the NZDCHF price has been increasing and is now 0.70 Swiss Franc. This becomes a new support zone once there is a pullback below this price. 

The trader can then enter a LONG trade here, if the former support level was 0.67, they could place a stop-loss at 0.65. The ideal time to end the transaction would be once they satisfy their risk-reward ratio. Or when the price action signals a change in direction.

Candlesticks trading

Candlesticks trading is another price action approach, but it involves looking at the candlestick on the chart to determine the price movements.

Each candle is made up of a body and a wick (or shadow). The body indicates the distance between the opening price for the day and the closing. The Wick represents the price movement, high and low or rise and fall, during the period.

Longer wicks mean that the price rose to a level but dropped again. And with a pair whereby the base has a lower value, it is likely that the NZD will appreciate in value. A longer wick, in this case, is a signal to take a LONG position. 

Inside bar trading after a breakout

Trading breakouts with the NZDCHF can be tough. Like all other currency crosses, it is hard to tell if the break is false or genuine. 

The inside bar breakout occurs after a large breakout. That is the inside bar pattern emerges as one or more candles move within the price highs and lows of a large breakout candle.

This setup implies that the market is keeping to the new trend’s direction, and there will be no more breakouts soon.

Trendline trading strategy 

The trendline technique involves using lines to determine the best entry points into the market.

For instance, in a downtrend market, the price action trader draws a line from a specified price reduction point to a predetermined one. A retracement point to the trendline indicates the best entry point to join the downtrend. 

Traders use horizontal trendlines in a range-bound market condition. It helps determine the support and resistance zones, and these are ideal entry points for trading a ranging price movement.

These strategies, if used correctly, can produce successful results with the NZDCHF. It is essential to first, identify the market condition as minors pairs can be highly volatile and unstable. But whether the market is in an upward trend, a downtrend, or choppy, accurately applying the techniques can be effective. Traders must ensure to have their risk management settings at the appropriate value to protect their funds.

Now, we will recommend a few brokerage firms that offer the NZDCHF pair with quality service. They are:

  • OctaFx 
  • XM broker
  • Plus500

There are more than a few, but we recommend these three for their competitive fees, outstanding support service, and user-friendly trading environments. 

Below we give you an overview of their offerings:

OctaFx 

  • Minimum deposit – $25
  • Regulation – CySEC, SVG FSA.
  • Leverage – 500:1
  • Average spreads – 1.6pips on NZDCHF. Starts from 0.6pips on majors. 
  • Commission – $10 per lot size (1 lot)
  • Other fees – none
  • Assets – Forex, metals, energy, indices, cryptocurrencies. 
  • Trading platforms – Mt4, Mt5.
  • Support – 24-7. Live chat is available throughout the weekdays. 
  • Payment methods – credit and debit cards, bank wire, bitcoin, Skrill, Neteller.
  • Headquarters – Cyprus 
  • Year founded – 2011

Features of OctaFx

Straightforward account opening

The low minimum deposit makes it easy to start trading with this broker. The sign-up process is also pretty straightforward and takes only a few minutes. 

Accepts bitcoins payment

Clients can pay in bitcoins and also trade with it. The broker offers leverage to trade more than 27 cryptocurrencies. 

Competitive fees

OctaFx is among the regulated brokers offering quality service at competitive fees. The broker does not charge withdrawal, deposit, inactivity, or other unnecessary fees one may encounter with other brokers.

Learn from successful traders

Social and copy trading is available here. Inexperienced traders can learn from successful ones and copy their strategies on this platform. Traders of any level, including beginners, will find this conducive trading environment to profit from the NZDCHF. 

Cons of OctaFx

  • Limited asset varieties

The broker does not offer many ranges of assets. So traders may find little opportunity to diversify here.

XM brokers

  • Minimum deposit – $5
  • Regulation – ASIC, CySEC 
  • Leverage – 1:888
  • Average spreads – 1.4pips average spreads on NZDCHF. Starts from 0.0pips for major pairs.
  • Commission – $7 per trade
  • Other fees – $15 inactivity fee
  • Assets – Forex and CFDs, such as stocks, indices, metals, and energies.
  • Trading platforms – Mt4, Mt5.
  • Payment methods – credit and debit cards, bank wire, bitcoin, Skrill, Neteller.
  • Headquarters – Cyprus 
  • Year founded – 2009

Features of XM broker

Special VPS for traders

The broker provides special VPS for certain clients, allowing for speedy execution regardless of the clients’ location, internet speed, and access to electricity. Although this unique feature is only available for high volume clients, trading up to $5000 per month.

Guaranteed stop-loss 

With the broker, stop-loss and limit order executions are guaranteed up to 50 lots in size. Traders also enjoy zero slippages, with no requotes.

Outstanding support service

Its customer service is readily available, responds on time, and resolves complaints quickly. Multilingual service is available in up to 30 languages. Live support is instantly reachable throughout the weekdays. Traders can send emails during the weekends for the service personnel to contact them.

Drawbacks of trading with XM broker

  • No cryptocurrency assets

The broker does not yet offer cryptocurrency trading among its assets. Traders who wish to include this in their investment portfolio can not find such an opportunity here.

Plus500

  • Minimum deposit – $100
  • Regulation – CySEC, FCA, FSCA, ASIC.
  • Leverage – 1:2
  • Average spreads – 0.8pips on majors. NZDCHF starts from 0.4pips. 
  • Commission – Commission free accounts
  • Other fees – $10 inactivity fee. Overnight charges apply.
  • Assets – Forex, stocks and cryptocurrency CFDs, stock.
  • Trading platforms – Plus500 trading app, web trader.  
  • Payment methods – Visa, MasterCard, Paypal, Skrill, Bank wire.
  • Headquarters – Israel
  • Year founded – 2008

Features of Plus500

Well-regulated broker

The broker has licenses in several regions, making it a highly trustworthy one. Traders in these regions enjoy insurance on their funds in case of eventually. Personal data are also protected from online scammers with such a broker.

Variety of assets to trade

Apart from forex, the trader has the opportunity to diversify with equities and options. The broker provides an avenue to do this easily and expand your portfolio. 

Cons of trading with Plus500

  • Low leverage 

Its leverage is among the lowest in the industry. This means traders have little opportunity for big profits if the capital invested is inadequate.

Вывод

These brokers are among the best ones for the NZDCHF pair. And the strategies explained can generate profit with this pair. The trader needs to apply them accurately, trade at the best time, and use a good broker to really earn with this pair.

Forex trading is risky, so we recommend you take time to get familiar with the basic risk management approaches before investing, especially when trading a minor pair. As long as you bear all this in mind, you too can find opportunities to earn trading the NZDCHF pair.

Witzeltrading.com

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