Exotic currency pairs minor but profitable

Exotic currency pairs: minor but profitable

Nobody argues that
the most liquid – International Forex Market
in the world. Similarly, it is an indisputable
the fact that the level of liquidity
It is largely the result of the relationship
in popularity of specific currencies. About
70% of trade transactions involve
a limited number of the most popular
currencies such as US dollar
(USD), euro (EUR), Swiss Franc (CHF),
British Pound (GBP) and Japanese Yen
(JPY). In addition, it is becoming popular
Canadian (CAD) and New Zealand (NZD)
dollar.

After these front
reaching rates in popularity are
currency pairs, called "crosses"
(Cross quotes), in particular containing no
US dollar (USD). Other
currency pairs are called "exotic".
bids on them are carried out with a smaller
volumes, participants in these trades
is limited contingent
traders. Interestingly, some
Even the Russian ruble referred to
exotic.

around trade
exotic currency pairs there
a number of myths, some of which are immediately
also discourage trading in Forex
traders and other errors lead to
erroneous conclusions. Try to understand,
what are the key characteristics from
these rates, try to dispel myths
and lead strong enough
arguments "BEHIND" trade "exotic"
and share experiences of innovation
approach to exotic trade
currencies.

The main difference – it
geographical origin of the currency.
Geographically exotic currencies
come from the following regions: Asia,
Middle East, Pacific
region and Africa. The most important
Trader technical differences exotics
from the majors and cross quotes:

1. Higher (from the point
Day of motion in points)
volatility.

This factor is
basic, and large amounts of other
important difference is its direct
or indirect causes. In exotic
currency – significantly different in comparison with the
American and European meaning
interest rates
Local central banks,
lack of activity, as a result of
which price may rise sharply
or fall, political and economic
medium with high volatility.

2. High values
brokerage commissions (spreads).

In good-quality and cost
brokerage commissions stable value
It has a direct relationship with the popularity
trading tool, as it is associated
with transaction costs.

The real problem,
that may occur is the lack of
information on currency movements. AT
the case of the majors and cross quotes trader accustomed to
work with more easily
information available – it very much
on the Internet, on TV. While both opinions,
analyzes and forecasts are available concrete
via the Internet almost non-stop mode,
in the case of the presence of such exotic
materials is very complex
task. And you have to collect information
bit by bit, and even a small amount
Amateur blogs do not help alleviate the
this task.

high volatility
– it is certainly very good. After all
the potential for earnings in volatile
and Non-Volatile markets varies widely.
But do not forget that volatile
Market – this is a very risky market.
Take for example the British pound.
For this currency can be seen daily
movement from 150 to 550 points. And if you take
exotic currency pair USD / ZAD
(Dollar / South African rand), then it
Daily movement can occur before
1,000 points in a day. But this is only
average value. And in the period of unrest
day step can reach from 7000 to
8000 points. Of course, in comparison with the
the British pound, you can do
good money. But, at the same time as
It mentioned above, together with the
potential earnings significantly
It grows and risk.

Sometimes trading
“Minor” prevents currency pairs
psychological factor. Everyone thinks:
“Why do I need it, when there is a sea
major currency pairs for which
enough information to
stable and so on? “At this time,
everyone is aware of how much trouble will
him that he would trade on
on the “exotic” currency market.

Why do we sell
“Exotic” when there is stable
major currency pairs?

1. First of all,
profit. Nor in any other currency
Forex pair you will not be able to obtain such
big profits in a short period
time as “exotic”. Of course,
If there are more at your disposal
the commercial capital, which you can
manipulated without fear of losing, then
you can easily trade in this case and
major currency pairs. But all things
things being equal, the potential
yield “exotic” significantly
higher than the major currency pairs.

2. At trade
minor currency pairs for
You have a wide horizon
actions. You can explore the inner
market of a particular country and on the basis of
develop a variety of
strategy.

3. Ability to use
exotic currency pair as a
an additional source of income.

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