Updated on: December 2nd, 2021
Currency Trading NZ Ultimate Guide For Beginners
Currency trading has become the prime market in demand globally. That is why it is the largest market where people invest their money, and it is growing with time. Another name for currency trading is foreign exchange, also known as FOREX or FX. The purpose of currency trading is to make a profit.
Currency trading is not an easy activity to perform. Even at times, the jack of all traders can face a huge loss because understanding the predictions of ups and downs of currency trading is highly difficult. If you do not have enough information about foreign exchange trading, then it is going to be very difficult to make a profit in the long run.
Updated on: December 2nd, 2021
In This Guide
- 1 Top Currency Trading Brokers in New Zealand
- 2 What is Currency Trading in New Zealand?
- 3 Strategies of the FOREX market
- 4 How does currency trading work in New Zealand?
- 5 Strategies for the Forex Exchange of New Zealand
- 6 What is the best time to do currency trading in New Zealand?
- 7 Currency Trading Terminologies You Need To Know
- 8 How to do currency trading NZ?
- 9 Summary of Top NZ Brokers for Currency Trading
- 10 Benefits of Currency Trading NZ
- 11 How To Avoid Scams
- 12 Final Thoughts
Top Currency Trading Brokers in New Zealand
VFSC, CySEC
100% bonus
$100
500:1
ASIC, VFSC
N/A
$100
500:1
ASIC, CBI, BVI, FSCA, IIROC, FFAJ, JFSA, ADGM FRSA
up to 40% bonus
$100
400:1
CySec, ASIC, BVI
up to 50% bonus
$100
400:1
ASIC, VFSC
$10 000 demo
$50
500:1
FCA, ASIC, CIMA, SIBL
up to 50% bonus
$100
500:1
What is Currency Trading in New Zealand?
Well, first, we need to know more in-depth about what exactly currency trading is. As the name implies, it involves currencies. It is the buying and selling of currencies at a profitable margin because the chances are that they will increase in value with time. It causes you to receive profits if the demand for a particular currency increases. Currency exchange is most commonly known as Forex trading in New Zealand.
In currency trading, you have to sell one currency and buy another currency at a single point in time. It should be understood that exchanging your currency with another currency at your local bank is not currency trading or FOREX. This is a mere currency conversation.
Strategies of the FOREX market
Currency trading strategies are very important to learn. To make a handsome amount of profit, one must start learning the strategies which help in making more profit. To find the strategies that make your win the profit is going to need a lot of knowledge and practice. There are many brokers present in the currency trading market that let you make a currency trading virtual account where you invest (buy and sell) with the virtual money to comprehend the winning strategies of the currency trading market.
How does currency trading work in New Zealand?
Before anything, you need a license for forex trading acquired by the FMA – Financial Service Provider, located in New Zealand. There are requirements needed to be fulfilled to obtain your license, which is only valid for New Zealand residents. The following requirements depend upon the type of client interested in trading, such as a business owner, shareholder, etc.
The following requirements are:
- Copy of valid passport
- Utility bill or bank statement for proof of business or residential address.
- Bank reference letter
- CV
- Your lawyer or Chartered Accountant’s reference letter
- Certificate of your educational qualification
- Bank balance confirmation- mainly for shareholders
The time taken for obtaining your license through FMA may take longer. Still, legal license provider companies that deal in providing licenses make the process easier for you, and it is less time-consuming for the license to be approved. You need to follow this in order to Currency trading NZ in a good way.
Secondly, it is important to be informed about forex contracts that provide information about different currencies and their performance by giving authentic statistics.
Contracts like CFDs, Options, and Futures are widely known among the traders in New Zealand and are recommended!
When Tradi
The forex trading market works in pairs. These pairs formed are in a standard form. Following are the pairs that the currency trading works on
- European Dollar (EUR) and United States Dollar (USD)
- New Zealand Dollar (NZD) and United States Dollar (USD)
- New Zealand Dollar (NZD) and Australian Dollar (AUD)
The trader has to predict the appreciation and depreciation of the two currencies in one pair. If he or she thinks that one of the currencies is about to appreciate, then he or she will buy that currency.
Following is an easy example to improve your understanding.
- You suppose that the USD is going to depreciate against the NZD
- The current rate of the NZD to USD is 0.72.
- So, you approach by 100,000 NZD vs. the USD.
- Later by the time, as predicted, the NZD appreciated to 0.75.
- Now it’s time to convert the USD to NZD back. So your profit is $5000
- It does not always happen like this. At times you can lose money as well.
Currency trading tips that will help you make more money in New Zealand
It is really important that one stays very conscious while performing currency trading because, at times, it is also backed by fraud. A lot of traders might think that currency trading in the forex market is an easy way to earn money online. That is not the case; very few traders can make money in currency trading; most can lose a lot of it. It is going to require a lot of patience and practice to win this market.
Strategies for the Forex Exchange of New Zealand
There is appropriate and proper planning required for planning forex trading strategies. Always be an enthusiast for learning new strategies to win the market of FOREX. Ace different techniques to extend your chances of steady benefit. Make sure that you begin with developing a game plan. A few of the strategies that traders use are given below.
Price Action Trading strategy
If you appreciate deciphering hourly and every day charts, you may also love exchanging and trading off the exchange rates. You will make more profits by anticipating the following curves on the graph. Price action traders’ dealers are more concerned with a movement of the currency present in the pair. These exchanges are implied to be quick — macroeconomic conditions and long-term trends typically don’t matter as much when utilizing this technique.
Range Trading strategy
This type of strategy involves understanding the range of the pairs. The traders try to take into account the oversold and the pairs that are overbought. Understanding their patterns, he or she, therefore, trades in the pairs. This type of trading tends to be held for hours or days at times for minutes as well.
Swing Exchanging
Swing exchanging is a type of technique that mainly includes analysis of the markets for corrective behavior which is pending. Here at times, the traders try to hold his position for more than twenty-four hours. The traders must have the ability to understand the dwindling and increasing of the currency curves to understand the process of progress. This comparatively a slower strategy or a technique.
What is the best time to do currency trading in New Zealand?
Although one can do foreign currency trading at any time of the day, it can wear out the trader easily if he has to keep up with the market the whole day. That is why it is better to understand what time of the day the market is at its peak, so one should start trading.
One must understand the market is at its peak of trading when all four markets are open. The timings of these four markets must overlap with each other. Overlapping will tend to take the market on its peak of trading all over the world.
The best time to do currency trading in New Zealand is between 4 pm to 6 pm. In these two hours, the currency trading markets all over the world are overlapping and are at peak. The simultaneous opening of the markets increases the pips of the currencies by more than 70 pips. This also helps in unlocking the currencies in the pairs when all the markets are open.
Currency Trading Terminologies You Need To Know
As a beginner in forex, there are a few terms we need to know before we start investing here. You should know these basic in order to do Currency trading NZ.
Currency pair: two different currencies are competed for side by side by the forex trader – you, about whether the currency you prefer will be having more profit or not. The assumption is made upon the research done by you regarding how the particular currency has been performing over the years.
It is mostly shown as, e.g., EUR/USD, showing that we are trading for euros against US dollars.
Leverage: the money you borrow from the trading account. It allows the trader to have low expenses while maintaining a large contract size.
Bid and ask Price: traders as bidders, who are willing to sell a currency for a demanded price of their own choice. The asking price is by another trader who is interested in buying the currency.
To go ‘long’: Going long means you are investing in a currency that will increase in demand. The first part of the pair is bought, and the other part is sold. E.g., EUR/USD, where euros are bought by the trader while selling the US dollar.
Going short: Meaning the opposite of going long. Basically, to sell a currency due to chances that it will devalue after a period. Here the first currency is sold to gain the second currency back.
Margin: the initial investment or a small percentage of the currency value to be paid to start trading. It emphasizes both profits and losses.
PIP: known as Percentage In Point, which shows the exchange paid for the currency pair. E.g., 1 US dollar needed to buy 3.67 Dirham. If the dollar increases further, traders will be able to buy more dirhams.
Lot size: the size of trade the trader opens. 1 Lot is equal to 100,000 units. For instance, we have the pair of NZD/USD, opening trade in USD will be equal to NZ $100,000.
Bearish or Bullish: Bearish means prices are going down, and Bullish means that prices are increasing.
How to do currency trading NZ?
Before anything, you need a license for forex trading acquired by the FMA – Financial Service Provider, located in New Zealand. There are requirements needed to be fulfilled to obtain your license, which is only valid for New Zealand residents. The following requirements depend upon the type of client interested in trading, such as a business owner, shareholder, etc.
The following requirements are:
- Copy of valid passport
- Utility bill or bank statement for proof of business or residential address.
- Bank reference letter
- CV
- Your lawyer or Chartered Accountant’s reference letter
- Certificate of your educational qualification
- Bank balance confirmation- mainly for shareholders
The time taken for obtaining your license through FMA may take longer. Still, legal license provider companies that deal in providing licenses make the process easier for you, and it is less time-consuming for the license to be approved. You need to follow this in order to Currency trading NZ in a good way.
Secondly, it is important to be informed about forex contracts that provide information about different currencies and their performance by giving authentic statistics.
Contracts like CFDs, Options, and Futures are widely known among the traders in New Zealand and are recommended!
Summary of Top NZ Brokers for Currency Trading
Most importantly, the wisest decision left to be made is to decide which forex broker to invest in.
To make it easier for you, we have listed the top three brokers based in New Zealand and are high in demand and profitable. The following brokers are:
Black Bull Markets: found in 2014, it is the most reliable company that has an up to online data system, making it easier for you to sit home and invest. The big catch? You are being offered a 30-day demo trading account to understand the whole forex system and the company’s ecosystem!
Jarden: for an experience of over 60 years, this company has covered many different investment products over the years and is highly known for it. It is regarded as the main competitor against other platforms.
Plus500: The company deals with multiple investment types like CFDs on shares, forex, indices, and even cryptocurrency like Bitcoin. It offers multiple payment methods.
So, these are some of the best brokers for Currency trading NZ.
Benefits of Currency Trading NZ
The main reason why people are heavily invested in currency trading is due to the great chances the trader sees in profits flowing into their bank. But here are a couple of more reasons why you should invest in forex.
- A beneficial side hustles for those who have very limited time to offer. You can show up anytime you have during the day without having any restrictions.
- Knowledge is power, no matter what it is related to, and forex trade may encourage a person to gain knowledge related to their currency and the ones they are investing in. Since forex relies on deciding to go long or short, the decision heavily relies on the country’s current status and the way it is performing all around the world.
- Fast liquidity. The investment made in currency gives us profit faster than on any other resource. It can be easily sold and bought without extra expenses and is easier to handle.
- It is easy to find buyers and sellers in forex trading as you are familiar with people and their interest in a particular currency.
How To Avoid Scams
Since forex is very lucrative, there are also possibilities that you might get in touch with a scammer. It is why it is very important to know your forex broker before making any investment.
- Do not rely solely on the internet. There are many deals and false benefits that brokers provide, which may cause you to lose all of your investments. These people can easily show up on major publication sites by tricking the Google system and are easily available on YouTube.
- A thorough background check is needed for forex platforms you haven’t heard about from anyone who already has forex experience. Chances are, these platforms do not have a license, and such people usually lure you in through call centers.
- Many social media personalities offer to provide the masses, claiming that forex trading can be learned with a 7 – week course for $50. Or worse, that you will have to sign-up for highly informative coaching lessons, which charge you around thousands of dollars.
- The fact is that information is already readily available if you talk through an authentic trader or broker who has vast amounts of experience.
- Your instincts and thought process matters a lot if you think a product is not worth your investment. There are plenty of smooth talkers claiming a product will be high in demand and ‘you will miss the chance of this huge offer.’
- These are traits of persuasive communication, causing you to believe in them. So it would help if you were cautious of this behavior.
Final Thoughts
Although everyone urges to make money online and currency trading is one of the ways, but it is highly important one should completely understand the FOREX before trading. With all of the information needed to get started, I hope you start Currency trading NZ with patience, knowledge, and dedication, which are needed to be a successful currency/ forex trader.
