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Trading NZDCHF for Huge Profits

  • #1
  • First Post: Edited 12:14pm Nov 11, 2017 10:54am | Edited 12:14pm
I am starting this thread to explore the Carry Trade Potential with the Pair NZDCHF.

NZDCHF is currently the most profitable carry trade of the 8 major currencies typically traded. Using a rough example in an account of 400:1 leverage, and a $50,000 USD investment, a trader could stand to make substantial profits, using only 25% of the available leverage:

50,000 x 100:1 = 5 Million
NZD central bank rate = 1.75%
CHF central bank rate = -.75%
Combined Carry Trade Interest = 2.50%

5,000,000 x 2.5% = $125,000 Interest Annually or $10,400 monthly.
Amount gained per pip change in exchange rate = 5 Million/10,000 = $500/pip
If the Pair increased by 1 cent over a month, the trader would profit 100 pips x $500 = $50,000 plus $10,400 in interest earned.
At that point, trader takes his initial investment out of the account and continues trading with only his profits, which would be $60,400. resulting in a nice interest income of 604/500 x $10,400 = $12,500 per month.

AT THIS POINT THERE WOULD BE ZERO RISK.

And it would only rise from there, with trader doing no trades except the initial purchase of 50 lots at the broker.

All you have to ascertain is low risk in purchase price level that the Pair won't fall any further or by much. Here is the current Daily Chart:

Attached Image (click to enlarge)
Click to Enlarge Name: NZDCHF Daily w Support.PNG Size: 102 KB
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  • #2
  • Nov 11, 2017 11:30am Nov 11, 2017 11:30am
How long have you been trading this pair?

KP
Do your homework, follow the footprints of smart money
  • #3
  • Edited 12:10pm Nov 11, 2017 11:32am | Edited 12:10pm
NOTICE the highlighted support zones in my first post, with the latest one just below the current price. Is this Pair on its way up? If so, this trade is with very little risk and if a trader used half the 400;1 leverage available, monthly interest income would double to $20,000 USD, as compared to my initial example.
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  • #4
  • Nov 11, 2017 11:38am Nov 11, 2017 11:38am
Quoting KeenPips
How long have you been trading this pair? KP
Hi Keen
I haven't been trading this pair at all. This morning, remembering that Switzerland actually pays you for borrowing their money, just thought I would work my desk calculator for a bit to see what i came up with. And its worth considering, now that i see the pair could be at a very good entry point. Remember the carry trade back in the last decade when traders boosted the USDJPY to around 1.25 levels? The next carry trade interest was around 5% -- double what this is.
Let the Market come to you
  • #5
  • Nov 11, 2017 12:16pm Nov 11, 2017 12:16pm
Is anyone still doing the Muslim account scam? I haven't heard about this lately but it used to come up all the time.

To apply it in this case, open up a long NZDCHF trade with a regular broker and collect the swaps.

Open up an equal sized short NZDCHF position with an Islamic swaps free account.

You don't care where price goes as losses on one account are offset by gains on the other. You're in it to collect the Swaps.

I've seen a lot of people brag about doing this. I never did it and wouldn't. I'm not a Muslim and wouldn't lie to anyone about it to get a swaps free account.
  • #6
  • Nov 11, 2017 6:10pm Nov 11, 2017 6:10pm
Quoting billbss
Is anyone still doing the Muslim account scam? I haven't heard about this lately but it used to come up all the time. To apply it in this case, open up a long NZDCHF trade with a regular broker and collect the swaps. Open up an equal sized short NZDCHF position with an Islamic swaps free account. You don't care where price goes as losses on one account are offset by gains on the other. You're in it to collect the Swaps. I've seen a lot of people brag about doing this. I never did it and wouldn't. I'm not a Muslim and wouldn't lie to anyone about...
Hi billbss,

Even if you were Muslim it wouldnt make sense to do that.

Because main reason why Muslims choose Islamic account is so that they obey the religion (dont collect interest or dont pay interest). So collecting swap(interest) would go against the religion in the first place.
  • #7
  • Nov 11, 2017 6:30pm Nov 11, 2017 6:30pm
Quoting hibra68
{quote} Hi billbss, Even if you were Muslim it wouldnt make sense to do that. Because main reason why Muslims choose Islamic account is so that they obey the religion (dont collect interest or dont pay interest). So collecting swap(interest) would go against the religion in the first place.
Hilbra
No,, no.. the person who is opening up the Islamic account, as Billbss described wold NOT BE a muslim... just pretending he is. So yes it would work. But he would have to lie about his/her religion.
A trader would be collecting $20,000 a month is you had something like $100k on deposit on each account. But if you blew one account you would have to close the other to limit risk. Hopefully that wouldn't happen for a year, and that would net you 20,000 x12 = a cool $240,000 for that year. Almost a 1/4 Million.

Cheers,
Let the Market come to you
  • #8
  • Nov 11, 2017 7:00pm Nov 11, 2017 7:00pm
Quoting AlGer
I am starting this thread to explore the Carry Trade Potential with the Pair NZDCHF. NZDCHF is currently the most profitable carry trade of the 8 major currencies typically traded. Using a rough example in an account of 400:1 leverage, and a $50,000 USD investment, a trader could stand to make substantial profits, using only 25% of the available leverage: 50,000 x 100:1 = 5 Million NZD central bank rate = 1.75% CHF central bank rate = -.75% Combined Carry Trade Interest = 2.50% 5,000,000 x 2.5% = $125,000 Interest Annually or $10,400 monthly. Amount...
Pretty interesting system. Unfortunately it takes substantial capital.
Here's Tom with the weather.
  • #9
  • Nov 11, 2017 8:37pm Nov 11, 2017 8:37pm
Quoting OHLC
{quote} Pretty interesting system. Unfortunately it takes substantial capital.
It's all relative. No matter how small your account size is you will still be making x% a day from interest which would be x% of return on your equity. If you did something like this over years your will compound. We all shouldn't be looking for some super get rich over night idea. If there was one, then everyone would be doing it.
  • #10
  • Nov 12, 2017 12:28am Nov 12, 2017 12:28am
Quoting AlGer
{quote} Hilbra No,, no.. the person who is opening up the Islamic account, as Billbss described wold NOT BE a muslim... just pretending he is. So yes it would work. But he would have to lie about his/her religion. A trader would be collecting $20,000 a month is you had something like $100k on deposit on each account. But if you blew one account you would have to close the other to limit risk. Hopefully that wouldn't happen for a year, and that would net you 20,000 x12 = a cool $240,000 for that year. Almost a 1/4 Million. Cheers,
You would transfer money into the low account from the profitable account, as needed, to make sure you didn't blow it.
  • #11
  • Nov 12, 2017 6:25am Nov 12, 2017 6:25am
Quoting billbss
Is anyone still doing the Muslim account scam? I haven't heard about this lately but it used to come up all the time. To apply it in this case, open up a long NZDCHF trade with a regular broker and collect the swaps. Open up an equal sized short NZDCHF position with an Islamic swaps free account. You don't care where price goes as losses on one account are offset by gains on the other. You're in it to collect the Swaps. I've seen a lot of people brag about doing this. I never did it and wouldn't. I'm not a Muslim and wouldn't lie to anyone about...
That doesn't really work. Islamic accounts don't get or pay swaps, but if you hold a position for more than 2 days, you are normally charged an "admin fee". You can see that on the websites of brokers offereing islamic accounts. Think about it, if you open a position where you have to get the swap, the broker will be very happy with you as an islamic trader, because it would be getting the swap with no risk. On the other hand, if you open a position where you have to pay swap, do you think the broker would simply pay it for you? Somehow this price must be included somewhere, for example in extra commissions or "admin" fees.

Check out some islamic account offers on Pepperstone, OctaFX and other brokers offering islamic accounts.
  • #12
  • Nov 12, 2017 8:01am Nov 12, 2017 8:01am
Quoting 1a2b3c
{quote} That doesn't really work. Islamic accounts don't get or pay swaps, but if you hold a position for more than 2 days, you are normally charged an "admin fee". You can see that on the websites of brokers offereing islamic accounts. Think about it, if you open a position where you have to get the swap, the broker will be very happy with you as an islamic trader, because it would be getting the swap with no risk. On the other hand, if you open a position where you have to pay swap, do you think the broker would simply pay it for you? Somehow...
I did. I found two brokers who claim they do not widen spreads or charge extra commissions for Islamic accounts.
I won't advertise them here. I did a GOOGLE for "Islamic no swaps forex" and the first one I saw makes this claim.
  • #13
  • Nov 12, 2017 9:43am Nov 12, 2017 9:43am
i dont belive this, i never saw any broker where this works.
The biggest drawdown is ahead of you
  • #14
  • Nov 12, 2017 1:05pm Nov 12, 2017 1:05pm
I agree with 1a2b3c , that the broker must somehow get the interest swap from the customer. An admin fee or commission would be likely payable. Pepperstone has a separate column called "commission" on the Terminal, and likely that is what this column would be used for. This was likely a "loophole" a few years ago, and a Rush of traders went to collect the extra swap, but I can't see it being an ongoing situation as brokers would constantly be paying for swaps instead of the traders. Having said that, Forex Brokers make more money than any retail trader... their profits are huge. A friend of mine was an introducing broker for IBFX for a short time and the money they made off of just a couple of retails traders was substantial. I can only imagine what the Broker must make overall. HUGE.

I am not going to trade the NZDCHF, as the risk of currency price fluctuation far outwieghs the return of swaps.
Cheers,
Let the Market come to you
  • #15
  • Nov 12, 2017 3:19pm Nov 12, 2017 3:19pm
I dont want to take this to a religious level but here is the story. Claiming interest rate is basically sin for all 3 major religions. Torah (which is the reference fow hebrew) states you cannot lend money with interest rate. But since jewish traders became basic funding source in Venice they made a small adjustment with jewish bible and it became as "a jewish cannot lend money to another jew" which then made Venice Jews to freely operate and basically formed the first banking institutions in the world. Then quite sometime later similar adjustments made by Vatican and here we go. Islam is the last religion to transform this with Islamic banking and interest free operations. For them as long as they dont know there is interest everything is cool. So whether you know or not in islamic forex you take that hidden interest with higher spreads or other means of charges. Another issue is by islam you cannot trade something you dont have which wouldnt be halal. So leveraged accounts are basically not halal (unless you are in direct trade). I just want to give this as a little note.

Coming to the original tread subject. I would like to tell you that if you would like to do carry trade then you should be trading with exotics where the interest rate differences are huge. I would say USDTRY pair is very benefitial in that sense. Just know where to sell. Oh and make sure your broker actually doesnt cut off too much from your rates. Nowadays FX is too risky to carry trade.
  • #16
  • Nov 12, 2017 4:39pm Nov 12, 2017 4:39pm
Quoting AlGer
I am starting this thread to explore the Carry Trade Potential with the Pair NZDCHF. NZDCHF is currently the most profitable carry trade of the 8 major currencies typically traded. Using a rough example in an account of 400:1 leverage, and a $50,000 USD investment, a trader could stand to make substantial profits, using only 25% of the available leverage: 50,000 x 100:1 = 5 Million NZD central bank rate = 1.75% CHF central bank rate = -.75% Combined Carry Trade Interest = 2.50% 5,000,000 x 2.5% = $125,000 Interest Annually or $10,400 monthly. Amount...
One can only benefit greatly when one catches long position on the pair, not when going short. Going short would be the worst swap or carry trade among all the pairs now. Be careful
Make all mistakes in demo and rain in pips in live account
  • #17
  • Nov 12, 2017 5:40pm Nov 12, 2017 5:40pm
Quoting 9jatrader
{quote} One can only benefit greatly when one catches long position on the pair, not when going short. Going short would be the worst swap or carry trade among all the pairs now. Be careful
9ja,, yes as I said in post #14, price going wrong way is too risky for carry trade profit. You're right.
Let the Market come to you
  • #18
  • Nov 13, 2017 6:04am Nov 13, 2017 6:04am
Quoting AlGer
{quote} 9ja,, yes as I said in post #14, price going wrong way is too risky for carry trade profit. You're right.
ok
Make all mistakes in demo and rain in pips in live account
  • #19
  • Nov 13, 2017 8:19am Nov 13, 2017 8:19am
Well good thing I never went thru with my plan. The pair has just lost 32 pips this week. That would have cost me 32 x $500 = $16,000 !!!

That said , the Daily chart is at two week low and less than a cent from support.. so who knows... lets watch and see.
Let the Market come to you
  • #20
  • May 14, 2018 9:21am May 14, 2018 9:21am
I trade NZD/CHF
I only ever buy
And anything under 0.70 I like alot (eg now at 0.691)
I don't use stops on this pair but I have enough capital to cover it if it goes lower.
And in that case I will continue to buy.
But you need to pay attention to swaps in general - some pairs now pay nothing on sell or buy, and different brokers pay different amounts.
It is not a get rich quick strategy.
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