Exotic currency pairs are the most volatile currency pairs and should be avoided. These currency pairs have least liquidity and in order to trade them, traders need a big amount of deposit to meet the losses in the form of large spreads.
Most traders avoid trading with exotic pairs because they have high volatility and high spreads. However, some people do trade with them but they have more expertise. Personally, I do not trade pairs like USD/SEK, EUR/TRY, and USD/HKD.
I notice traders claim about high volatility and they prefer less liquid currency pairs. I stand for volatility because I am convinced that high volatility means th opportunity to earn more money potentially. Ofc, it's not right to hurry for money and traders should be wise and make moves gradually, nevertheless I believe that volatile pairs are the most suitable for scalpers and day traders. In case we are talking about the potential income. BUT, remember about mistakes, losses and other unpleasant things. They as a rule confuse traders and makes them scary of the market.
Anyone new to forex trading will find the EUR/USD pair to be the most straightforward. That it's simple and liquid is a plus. In my opinion, novice traders should start out by trading simple currency pairs.
I think currency pair selection is an important part of your overall trading approach. But I understand a lot of Forex traders are confused about which currency pairs to trade. I typically do not trade in exotic pairs as they are highly volatile and are illiquid. The spreads are extremely wide and have a lack of market depth. They are riskier as compared to major pairs which are rather stable. Exotic pairs feature low trading volumes which lead to lack of liquidity which is why I do not like trading in exotic pairs which is my personal viewpoint.
HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors.
Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
You could lose some or all of your initial investment. Do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
Any data and information is provided 'as is' solely for informational purposes, and is not intended for trading purposes or advice.
Past performance is not indicative of future results.