Forex trading is one of the biggest markets around the world. In 2019, the average daily turnover of the Forex was as much as $5.1 trillion. This huge number shows exactly how the Forex market has developed in recent years.

Once, only huge financial companies, like banks, could participate in this market. As of today, it is accessible by anyone around the world. But, it still remains to be a very risky business. That is why investors should learn as much as they can about this market before they start trading.

There are three types of currency pairs available for investors when it comes to Forex. They include Major currency pairs, Minor currency pairs, and the exotic currency pairs. All of these are very different from one another and are created for different types of Forex traders.

As it is defined at, exotic pairs are the ones that consist of one major currency and another emerging-market economy currency. Examples of exotic currency pairs include USD/TRY, USD/MXN, EUR/HUF, and many others.

Trading exotic currency pairs are not something that works for everyone, however. Most of the Forex traders on the market prefer to use Major Currency Pairs, but exotic ones have their own users.

What should you know about trading exotic currency pairs?

Before you start investing in exotic currency pairs, there are some things that you need to be aware of. First of all, these currency pairs tend to be more volatile and less liquid than other currencies, like major ones. In 2016, for example, EUR/USD made up more than 23 percent of all daily Forex transactions, while, USD/TRY, for example, was standing at just 1.3 percent.

But what does it mean that the market is more volatile? It means that the prices are moving very frequently, and this happens more dramatically as well.

This is one of the main reasons why investors love using exotic currency pairs, with the help of volatility, it offers them an opportunity to realize a profit with the help of drastic and sudden price movements. But, keep in mind that this can also lead to losing huge amounts of money.

However, before you decide which Forex pair to use, you must be sure that you understand everything about this market. The thing is, choosing the perfect FX pair to trade is not an easy thing. Even investors with a lot of experience are having a very hard time to do so. But, if you make sure that you do your research and understand what are your needs on this market, you will be able to very easily find currency pair that works for you.

So, no matter which currency pairs you are using, you need trustworthy and accurate information. But this is especially true when it comes to trading exotic currency pairs because you have a bigger risk of losing huge amounts of money in just a few minutes.

What makes exotic currency pairs popular?

There are many people who prefer to trade exotic currency pairs over others. But why does this happen? What is the thing that people love about exotic pairs so much?

It turns out that there are a lot of those things. First of all, they tend to move very fast. Unlike major currency pairs, that are more or less stable, exotic currency pairs can change at any moment, at any altitude. On the other hand, this is used by many people as a reason to avoid trading exotic currencies.

The thing is, although it might be very attractive for many people, it also is very scary for many. Because of the risk that comes with it, many people decide to avoid trading these at all. However, traders should always remember that no matter what you do, Forex trading is very risky.

Also, trading exotics is simply fun. This helps people learn more about trading, and currency pairs as well. Many say that trading should not be for entertainment, but what’s wrong with enjoying it?

No matter what you do in the Forex market, it is very important to have enough information about everything that you do. It is especially true in the case of exotic currencies because the price of it is changing every moment. Be sure that you have access to accurate information and news pieces regarding the changes in the market since it can help you successfully predict future changes.

Author's Bio: 

John Smith is a Digital Marketing Consultant with more than 8 years of experience in SEO, SEM, SMO, blogging, etc having wide knowledge base into content marketing . do contact on