BEST EXOTIC FOREX PAIRS TO TRADE

When you go check on the best exotic forex pairs to trade on the internet; you will find a lot of information surrounding this topic, however, there is more to this than just listing a few exotic pairs to trade.

In my experience, I have come to see that any exotic forex pairs can be the best to trade with provided that you understand the basic principles of how the forex market works.

When you constantly make money on a certain forex pair, it certainly becomes your best trading pair.

That being said I will certainly list a few exotic pairs I have traded, with market structure understanding and I will encourage you to put this market analysis into consideration when trading these exotic forex pairs.

WHAT IS EXOTIC CURRENCY PAIRS?

Exotic currency pairs consist of a major currency pair is the base currency and a strong smaller emerging economy which currency will be the quote in the pair example is the USD/MXN.

These pairs come with a much larger spread than the major currency pairs because they lack liquidity due to the fact that they are not traded as often as the major currency pairs.

Exotic pairs are characterized by high volatility and trading with proper market analysis can give you a huge return in profit because of the nature of both economies.

RELATED: CURRENCY PAIRS THAT MOVE TOGETHER

BEST EXOTIC FOREX PAIRS TO TRADE

best exotic forex pairs to Trade

There are many exotic pairs to trade in the forex market; in my years of trading, this is my choice in the most successful exotic forex pairs to trade.

  1. USD/ZAR
  2. USD/MXN
  3. USD/PLN
  4. USD/NOK
  5. USD/TRY
  6. USD/RUB

RELATED: HOW TO TRADE GBP JPY SUCCESSFULLY

RELATED: BEST TIME TO TRADE NZDUSD

EXOTIC FOREX PAIRS LIST

This is a list of a few exotic forex pairs list and their countries;

PairsCountries
USD/ZARUS Dollar/South African Rand
GPB/DKKBritish Pounds/Danish Krone
USD/SGDUS Dollar/Singapore Dollar
USD/DKKUS Dollar/Danish krone
USD/SEKUS Dollar/ Swedish krona
USD/TRYUS Dollar/ Turkish Lira
USD/NOKUS Dollar/Norwegian krone
USD/MXNUS Dollar/Mexican Peso
USD/HKDUS Dollar/Hong Kong Dollar
EUR/TRYEURO/Turkish Lira
USD/PLNUS Dollar/ Polish zloty
USD/CNHUS Dollar/Chinese Yuan

RELATED: BEST PAIRS TO TRADE DURING TOKYO SESSION

MOST LIQUID CURRENCY PAIRS

most liquid forex currency pairs pie chart to trade

I am going to list the most liquid currency pairs in terms of market volume, before I do that let us first define what forex market liquidity is.

Forex market liquidity refers to an asset’s ability to be sold quickly and at the best possible price.

Liquidity in the forex market also means the most traded currency pairs

In terms of market volume, these are the most liquid currency pairs;

  1. EUR/USD
  2. GPB/USD
  3. NZD/USD
  4. USD/CAD
  5. USD/JPY
  6. USD/CHF
  7. AUD/USD
  8. AUD/JPY

According to the most traded currencies website, these are the top 25 most traded currencies with their shares of daily turnover.

RankCurrencyShare of turnover
(%)*
Average turnover
(Billion US$)
ISO 4217 codeCountry or territory
1US dollar87.624 458USDUnited States
2European Euro31.271 591EUR19 states of the EU
3Japanese yen21.561 097JPYJapan
4Pound sterling12.78650GBPUnited Kingdom
5Australian dollar6.94353AUDAustralia
6Canadian dollar5.13261CADCanada
7Swiss franc4.78243CHFSwitzerland
8Chinese Yuan Renminbi3.97202CNYChina
9Swedish krona2.22113SEKSweden
10Mexican peso2.20112MXNMexico
11New Zealand dollar2.06105NZDNew Zealand
12Singapore dollar1.7991SGDSingapore
13Hong Kong dollar1.7388HKDHong Kong (China)
14Norwegian krone1.6785NOKNorway
15South Korean won1.6584KRWSouth Korea
16Turkish lira1.4071TRYTurkey
17Indian rupee1.1458INRIndia
18Russian ruble1.1458RUBRussia
19Brazilian real1.0051BRLBrazil
20South African rand1.0051ZARSouth Africa
21Danish krone0.8342DKKDenmark
22Polish zloty0.6935PLNPoland
23New Taiwan dollar0.6332TWDTaiwan
24Thai baht0.4322THBThailand
25Malaysian ringgit0.4120MYRMalaysia

The most liquid currency pairs in January 2020 are depicted in an image pie chart below. Understand that the data is constantly changing due to the market situation at any given time.

MAJOR CURRENCY PAIRS

major forex currency pairs to trade

Major currency pairs are called major forex pairs for many reasons; one of these reasons is because they are paired with the US dollar and they are the most traded currency pairs in the forex market.

For example, the EUR/USD records a high trade volume amongst other currency pairs in the forex market.

Below are a few major currency pairs

EUR/USD

GPB/USD

USD/CAD

NZD/USD

USD/JPY

AUD/USD

USD/CHF

MINOR CURRENCY PAIRS

Minor currency pairs are also called cross-currencies. For a clearer definition Cross-currency pairs, or simply “crosses,” are currency pairs that do not include the US dollar. An example of this minor/cross-currency pair is the CAD/JPY.

BEST MINOR CURRENCY PAIRS

In my years of technical analysis trading, I have to know that the Japanese Yen pair currency is the best minor currency pair to trade and this is why.

The currencies paired with the JPY mostly operate on a different economic model.

Because of the different countries’ economic models, they make a perfect match when paired together, also in terms of their trading session. For example when one countries session opens, the other is closed.

Examples of these best minor pairs are:

  1. GBP/JPY
  2. AUD/JPY
  3. NZD/JPY
  4. EUR/JPY

MOST VOLATILE EXOTIC CURRENCY PAIRS

All the exotic currency pairs are volatile, however, the most volatile exotic currency pairs are

  1. USD/ZAR
  2. USD/PLN
  3. USD/MXN
  4. USD/NOK
  5. USD/TRY

ARE EXOTIC PAIRS WORTH TRADING?

This is a Yes and a No because your level of experience with the forex market will determine your choice of pairs. Generally, exotic pairs are less predictable than major pairs however the volatility of exotic pairs can give Hugh profit return when traded accurately with proper market analysis.

WHICH FOREX PAIR IS BEST FOR TRADING?

The best forex pairs for trading will have the following qualities
1.       High Liquidity (can be easily sold at the closes price)
2.       Good volatility (not crazily high like exotic pairs)
3.       Predictability ( repetition of market structures and patterns)
4.       Good spread (lower spread to exotic pairs)
5.       High trade volume ( traded by many traders and institutions)

WHICH CURRENCY PAIR IS MOST PROFITABLE IN FOREX?

There is no such thing as the most profitable currency pair as your understanding and patience in the forex market will determine how profitable you will be. However, the EUR/USD is the most traded currency pair in the forex market.

WHAT IS THE MOST VOLATILE FOREX PAIR?

Volatility in the forex market is relative; every currency pair is different and unique. It is relative in terms of its economic strength and the global event (fundamental new) at that time.

So the volatility of a currency changes if its economy changes. That being said in the periods of high impact fundamental news the currency will have strong price movement and trading volume increase.

IS ZAR AN EXOTIC CURRENCY?

Yes ZAR is an exotic currency; it is an exotic currency because of its strong smaller emerging economy.

WHAT IS THE SECOND MOST TRADED CURRENCY?

The EURO is the second most traded currency after the dollar; this is based on the daily transaction volume of the currency.