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.
Table of Contents
WHAT ARE 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
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.
RELATED: HOW TO TRADE GBP JPY SUCCESSFULLY
RELATED: BEST TIME TO TRADE NZDUSD
EXOTIC FOREX PAIRS LIST TO TRADE
This is a list of a few exotic forex pairs list and their countries;
|USD/ZAR||US Dollar/South African Rand|
|GPB/DKK||British Pounds/Danish Krone|
|USD/SGD||US Dollar/Singapore Dollar|
|USD/DKK||US Dollar/Danish krone|
|USD/SEK||US Dollar/ Swedish krona|
|USD/TRY||US Dollar/ Turkish Lira|
|USD/NOK||US Dollar/Norwegian krone|
|USD/MXN||US Dollar/Mexican Peso|
|USD/HKD||US Dollar/Hong Kong Dollar|
|USD/PLN||US Dollar/ Polish zloty|
|USD/CNH||US Dollar/Chinese Yuan|
RELATED: BEST PAIRS TO TRADE DURING TOKYO SESSION
MOST LIQUID CURRENCY PAIRS
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;
According to the most traded currencies website, these are the top 25 most traded currencies with their shares of daily turnover.
|Rank||Currency||Share of turnover|
|8||Chinese Yuan Renminbi||3.97|
|11||New Zealand dollar||2.06|
|13||Hong Kong dollar||1.73|
|15||South Korean won||1.65|
|20||South African rand||1.00|
|23||New Taiwan dollar||0.63|
|1||US dollar||4 458|
|2||European Euro||1 591|
|3||Japanese yen||1 097|
|8||Chinese Yuan Renminbi||202|
|11||New Zealand dollar||105|
|13||Hong Kong dollar||88|
|15||South Korean won||84|
|20||South African rand||51|
|23||New Taiwan dollar||32|
|Rank||Currency||ISO 4217 code|
|8||Chinese Yuan Renminbi||CNY|
|11||New Zealand dollar||NZD|
|13||Hong Kong dollar||HKD|
|15||South Korean won||KRW|
|20||South African rand||ZAR|
|23||New Taiwan dollar||TWD|
|Rank||Currency||Country or territory|
|1||US dollar||United States|
|2||European Euro||19 states of the EU|
|4||Pound sterling||United Kingdom|
|8||Chinese Yuan Renminbi||China|
|11||New Zealand dollar||New Zealand|
|13||Hong Kong dollar||Hong Kong (China)|
|15||South Korean won||South Korea|
|20||South African rand||South Africa|
|23||New Taiwan dollar||Taiwan|
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 EXOTIC 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
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 known 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 sessions. For example when one country’s session opens, the other is closed.
Examples of these best minor pairs are:
MOST VOLATILE EXOTIC CURRENCY PAIRS
All the exotic currency pairs are volatile, however, the most volatile exotic currency pairs are
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.