Exotic Currency Pairs

[ryuken]

I came across these pairs whle checking on the TV news and found that very few people are going to be trading in it. I wonder why? because some of these pairs are local and they do have some benefit for trading in them. they may not be a high earner but surely worth trading for. Have you found exotic currency pairs for your benefit or you don't like trading in them?

I am interested in knowing about them because if the profit is consistent, it would be worth risking in that instead of major currency pairs. like say USD, EUR and others.

 

[W.Jones]

Just in case few traders may not know what are Exotic currency pairs:

Exotic Currency Pairs

The exotic currency pairs, or the exotics, are the currency pairs that are comprised of the most important currency in the global markets—the U.S. dollar (USD)—crossed with any currency that is not considered a major currency. Exotic currencies—like the Swedish krone (SEK), the South African rand (ZAR), or the Mexican peso (MXN)—are called exotic because they are associated with illiquid currencies that might not be available in a standard trading account.

Exotic currencies are usually lightly traded and have large bid/ask spreads. However, many so-called “exotic”currencies are becoming more popular and more and more investors are trading them.

Take a look at the following list of exotic currency pairs because you may be interested in diversifying your forex portfolio with a few uncorrelated currency pairs:

USD/SEK (U.S. dollar / Swedish krone)
USD/NOK (U.S. dollar / Norwegian krone)
USD/DKK (U.S. dollar / Danish krone)
USD/HKD (U.S. dollar / Hong Kong dollar)
USD/ZAR (U.S. dollar / South African rand)
USD/THB (U.S. dollar / Thai baht)
USD/SGD (U.S. dollar / Singapore dollar)
USD/MXN (U.S. dollar / Mexican peso)

Major Currency Pairs

EUR/USD (Euro / U.S. dollar)
GBP/USD (British pound / U.S. dollar)
USD/CHF (U.S. dollar / Swiss franc)
USD/JPY (U.S. dollar / Japanese yen)
USD/CAD (U.S. dollar / Canadian dollar)
AUD/USD (Australian dollar / U.S. dollar)
NZD/USD (New Zealand dollar / U.S. dollar)

It's the most correct and informative about Exotic Paris. Eduction resource credit to TradeMentor - saxobank.com

 

[ryuken]

Thanks for the clarification. I am interested more in USD/THB (U.S. dollar / Thai baht) and USD/SGD (U.S. dollar / Singapore dollar), because these are local to asia and i would be interested in them. I see that singapore dollar to be more important due to lots of progress over the years.

 

[Orli]

I think trading exotic pairs is more for advanced forex traders, not for beginners. Am I right?

 

[W.Jones]

I think trading exotic pairs is more for advanced forex traders, not for beginners. Am I right?

Compare to Major pairs, Exotic pairs usually have higher spread so it's not really recommended for beginners. If spread is not really a matter and they can trade good on Exotic then there have no reason to avoid it. )

 

[kasual]

I think trading exotic pairs is more for advanced forex traders, not for beginners. Am I right?

like Jones said, exotic pair usually have high spread and for some pair, it excess 100 pips. moreover, exotic pair usually have less volatility too and so, short term, day trader and scalper will be unable to applies their trading style here. maybe only long term and investment trading style that suits to applied in exotic pair.

 

[PROPENSITY100]

like Jones said, exotic pair usually have high spread and for some pair, it excess 100 pips. moreover, exotic pair usually have less volatility too and so, short term, day trader and scalper will be unable to applies their trading style here. maybe only long term and investment trading style that suits to applied in exotic pair.

Basic pairs are more better for a trader to trade. These pairs have low spreads and contribute to a major part of the turnover in the Forex market. Trading in exotic pair pairs should be avoided since these pairs have high spreads which makes it difficult to make profit in these pairs. Its better to concentrate on a few basic pairs only like eurusd, gbpusd etc.

 

[eddiej]

I came across these pairs whle checking on the TV news and found that very few people are going to be trading in it. I wonder why? because some of these pairs are local and they do have some benefit for trading in them. they may not be a high earner but surely worth trading for. Have you found exotic currency pairs for your benefit or you don't like trading in them?

I am interested in knowing about them because if the profit is consistent, it would be worth risking in that instead of major currency pairs. like say USD, EUR and others.

I too am interested in knowing more about exotic currency pairs. How volatile are they? I do watch a couple of them from time to time but idk, i'm happy trading with the majors but i'm curious about exotic pairs.

 

[riddick09]

They can volatile for some instances most of the time in the times they have biggest Forex events. So far, I don't have much idea on how to trade well in these currencies or pairs because, of the limited knowledge and not much traded by traders so, we can't make use of the different traders signal about those exotic pairs.

 

[sindarin]

i think for this exotic currency pairs, i prefer USD/SGD ,because i think that SGD seems better as that country grows well. even like that i hope i can try other exotic currencies, but with higher spreads it will be better to stick with only one exotic currency

 

[rizal83]

I think the exotic currency pairs in the forex trading is eur / usd, gbp / usd and usd / jpy because I often trade with these three currency pairs but if we want to determine the currency pair that we will use in forex trading should we choose one currency pair for we can learn well and never to trade with many currency pairs if we are still not able to understand the character of each pasanan currency

 

[sindarin]

[MENTION=22266]rizal83[/MENTION]: EUR/USD is not exotic currency pair, see the first page to know more about it dude, that is one of the common currency pair that people use to trade, actually i want to trade more with Exotic currency pair, but it seems i don't have much time to do something like that, but it will be good if we can trade it also.

 

[PROPENSITY100]

[MENTION=22266]rizal83[/MENTION]: EUR/USD is not exotic currency pair, see the first page to know more about it dude, that is one of the common currency pair that people use to trade, actually i want to trade more with Exotic currency pair, but it seems i don't have much time to do something like that, but it will be good if we can trade it also.

The spread of a pair depends upon the liquidity of the pair. If a currency pair has low liquidity it will have higher spread. Brokers usually levy their fees in the form of spreads and do not have any other charges like account opening fees or trading commissions. Thus in the case of low liquid pairs brokers charge higher spreads to obtain their service charges.

 

[eddiej]

They can volatile for some instances most of the time in the times they have biggest Forex events. So far, I don't have much idea on how to trade well in these currencies or pairs because, of the limited knowledge and not much traded by traders so, we can't make use of the different traders signal about those exotic pairs.

I suggest you stick with the majors for now. Sometimes trading with exotic pairs isn't really worth it, sometimes the spreads are huge as well. Even most of the experienced traders stay away from the exotic pairs, and with good reason.

 

[sindarin]

I suggest you stick with the majors for now. Sometimes trading with exotic pairs isn't really worth it, sometimes the spreads are huge as well. Even most of the experienced traders stay away from the exotic pairs, and with good reason.

According to me exotic currency pair still fine, you can try them if your major currency pairs doesn't work well, and so far i think trying exotic currency is not a sin too, and if you know the right time to trade with that exotic currencies i am sure that you will gain so much bucks with it

 

[ryuken]

It is not much of beneficial to try those pairs because even our normal market pairs from asian countries can be exotic and they are not much fetching the money these days. I have seen the real time effect of those while the gold prices were coming down and that made it quite different for me.

 

[sindarin]

But that is not a sin to try that exotic currencies, i saw few people that increase their earning just because of this currencies pair, exotic pairs truly help us too in some moment, but don't rely too much with it, i prefer major currencies in mostly of my time, but don't forget about exotic currencies too

 

[ryuken]

Not a sin at all. I never said it was sin. it is about the profit and how the currency can be maanaged in the trading. I am not sure if the people are going to be making a good choice there for the forex because all the time it takes to make money it woould be quite hard to waste it in less earning.

 

[riddick09]

That's ridiculous why it become the discussion of sins in either you trade or not. Perhaps, the word you put there will be bad not sin. I don't know if that is really have sense, you will have sin if you trade in exotic pairs, no? So, that's the appropriate wording. Still, I don't really trade in exotic which has limited information or knowledge.

 

[gkintl]

Exotic currency pairs are those which are very less traded. Only those multinationals which earn money from those countries use forex market to convert the same into local currency. Thus, trading in exotic pairs would be very low. Also, the spreads would be wider. However, there are certain traders who take advantage of overnight call rates and make money by leaving the position open.