Chris Smith, of CMC Markets, said the dollar's rise was one of the factors behind a 100 per cent growth in new business year-on-year and double-digit growth in New Zealand trade activity and turnover.
The New Zealand dollar is now one of CMC's top 10 most-traded currencies. "The big push towards parity with the Aussie dollar has seen more interest," Smith told the Herald on Sunday.
Global interest rate changes also had an effect. "In January alone, 20 central banks around the world moved on interest rates, which causes huge volatility in currency," he said. "That is sparking interest in trading."
Currency trading was becoming increasingly popular, but newcomers should do some research before investing, only deal with reputable traders and be aware of the market's volatility. As with all financial trading, making a quick buck was no sure thing.
Foreign exchange trading works for people without a lot of money to play with because brokerage firms offer leverage.
In the same way that you might use a 10 per cent deposit to buy a house, traders usually only put 1-3 per cent of their own money into a trade. The rest is "borrowed" from the brokerage, which means being able to do a much larger trade.
If you put down a 1 per cent deposit of $100 on a trade of $10,000-worth of US dollars, and the US currency moves one full cent from 0.75c to 0.76c - which is 100pts - against the New Zealand dollar, you would make $100, instead of the $1 you would make if you were only trading with your own money.
But if it moved down a full cent, your $100 deposit would be wiped out.
Fulltime trader and forex coach Nick McDonald, of Trade with Precision, said would-be traders needed to learn about the markets. It was not a "get-rich-quick" strategy.
"It is certainly possible to make 5 per cent-plus trading. But I see people trying to make 5 per cent a day and that's less realistic."
Andrew Mitchem, a former dairy farmer who now runs the Forex Trading Coach, recommended would-be traders start with a demo account.
"They're free to use and you're trading with real price-action data but it isn't putting any of your own money at risk."
Brokerage firms charge a commission. CMC would charge $2 for someone trading US$10,000, and 78c every day the trader held the foreign currency funds.
Coaches recommend traders start with a balance of $500 and invest no more than 1 per cent of their balance on each transaction.
To limit their risk, traders are also encouraged to use a stop-loss strategy. This means they automatically cut their losses and get out when a currency moves below a set point.
The market can be traded 24 hours a day.
Traders are required to pay tax on their income of up to 33c in the dollar.
Campground manager by day ... trader by night
Campground owner Glenn Tattersall is one of the growing number of Kiwis trying to cash in on foreign exchange trading. The Wanaka man has been trying his hand for the past five months.
He decided to launch into the market because he could buy and sell foreign currency whenever and wherever he wanted. "It's completely flexible," he said.
He was also enticed by the returns a succession of good investments could provide.
Tattersall fits in trades around his work managing the popular Lake Outlet Holiday Park.
"It potentially can be a lucrative career, that's what interested me," he said. But he said the big returns were still some way off.
"I don't envisage mastering it for a long time. It's not to be taken lightly.
"There's potentially a massive amount of risk involved if you do it wrong.
"It's not for everyone. It's easy to do but not easy to get right."
Tattersall's biggest successes have been in trading the Australian dollar against the US dollar, and the British pound against the Australian dollar.
So far, he has broken even.
"I'm pretty happy with that start," he said.
"With the current low interest rates you can't put money in the bank and live off it any more.
"You really do have to develop other ways and skills to manage money in another way."
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