NZDCAD in the Asian session: boring on purpose

[Fairman]

NZDCAD in the Asian session: boring on purpose

Some pairs sit forgotten by most retail traders, and NZDCAD is a classic. During Asia, the New Zealand side is awake and the Canadian side is asleep, which means the pair trades on thin flow with a lot of random stepping.

Spreads are wide compared with the majors, often four to eight pips, and moves tend to be small. The pair does not respond much to news in the way USD pairs do, and it can trend gently for hours with shallow pullbacks.

The people who trade it well usually treat it as a slow, patient market, taking a few pips at a time with wider stops and low frequency. Those who treat it like EURUSD with a bigger spread tend to lose to costs.

What makes it interesting is the lack of crowding. Few traders watch it, so signals formed by the major flows elsewhere sometimes take a while to arrive.

A note on stops: wide spreads mean a stop needs room beyond the spread itself. A stop placed a few pips from entry on a pair with a six pip spread can be hit by the quote alone. Placing it relative to structure, with the spread added on top, is more realistic.

Is there a quiet pair that has quietly become a favourite, and what makes it work?