FBS brings an alternative option for traders to trade with exotic currencies. With a high volatility level, it is possible to gain more profit from the price movement.
Is there any chance for traders to pick less popular currencies to trade? The answer would be yes. There are the so-called exotic currencies, a term coined to refer to currencies that are not considered major or minor currencies and are less known in the trading world. It is agreed that Euro, US Dollar, and Japanese Yen are regarded as the major currencies which come from more powerful economies and offer a rather stable and more liquid. From the brief definition of the terms, it starts to get clearer. But how to trade this kind of currency, especially with a famous broker like FBS? Is it worth a shot?
What You Need to Know about Exotic Pairs
In short, exotic currency pairs is a pair that is part of the currency trading market and consist of one major currency from a more powerful nation such as the US Dollar (USD) traded against currencies of a developed nation like the Turkish Lira or Hungarian Forint. Basically, trading with exotic pairs is similar to trading with regular pairs, one will serve as a base and the other as a quote.
Exotic currencies are also highly influenced by many economic factors, such as foreign investments. interest rates, domestic market, as well as geopolitical factors. However, there are some traits that differentiate the pairs from the regular ones: Exotic currencies are less liquid but more volatile in their movements, making trading using this pair requires some specific trading strategies.
The main reason why trading exotic pairs is interesting despite the higher risk lies in their volatility. It means that the security's value can potentially be spread out over a larger range of value and bring more profit due to wide price movement.
Essentials Knowledge to Trade Exotic Pairs on FBS Broker
FBS is one of the leading brokers in the world that offers this option to traders. In addition to major and minor currency pairs, FBS traders might choose this kind of pair due to its diversity and appeal in order to get the maximum profit. The exotic pairs provided in FBS broker include:
- USD/TRY (US dollar/Turkish lira)
- USD/BRL (US dollar/Brazil real)
- USD/ZAR (US dollar/South African rand)
- CNH/JPY (Chinese yuan/Japanese yen)
- EUR/TRY (Euro/Turkish lira)
- USD/RBL (US dollar/Russian ruble)
- USD/CNH (US dollar/Chinese yuan)
- EUR/CNH (Euro/Chinese yuan)
- EUR/HUF (Euro/Hungarian forint)
- EUR/MXN (Euro/Mexican peso)
FBS traders will benefit from competitive spreads when trading exotic pairs. For example, USD/TRY, one of the most traded exotic pairs due to its very high volatility, has a 37.2 minimal spread. Other exotic pairs like CNH/JPY can even be traded with spreads as low as 2.0 pips.
Since 2009, the action of FBS Holding Inc. or known as FBS in the world of forex trading has been recognized by various international institutions. With clients reaching 14 million as of 2019, FBS has received the title of Most Transparent Forex Broker 2018, Best Investor Education 2017, Best Customer Service Broker Asia 2016, IB FX Program, and many others.
FBS is regulated by FSC Belize and CySEC Cyprus. This broker has been trusted by millions of traders and 370 thousand partners from various countries. Based on their data, FBS garners about 7,000 new traders and partner accounts every day. And, 80% of the clients stay in the FBS for a long time. No wonder the broker is growing rapidly due to the incredible growth in the number of clients.
Trading products offered by FBS range from forex, CFD, precious metal, and stock. For forex trading, CySEC-regulated FBS offers leverage up to 1:30 on Cent and Standard Accounts. Clients who want to try higher leverage than that can alternatively register an account under FBS Belize.
FBS spread begins from 0.5 pips for Pro account type and from 0.7 pips for Standard and Cent accounts. On a standard account, volume orders can be made from 0.01 to 500 lots. Therefore, this account is recommended for experienced traders.
Whereas on Cent Accounts, volume orders can be carried out with a maximum of 500 cent lots or the equivalent of 5 standard lots. Cent Accounts involve a different level of risk. FBS recommends Cent Accounts for beginner traders. All account types support the following trading instruments: 36 Forex pairs, 8 metals, 3 energies, 11 indices, 127 stocks, 5 crypto pairs.
Before plunging into the real forex market, traders can practice with FBS Demo Account which consists of two types, i.e Standard and Cent.
FBS uses the MetaTrader 4 and MetaTrader 5 platforms. They offer them on Windows and Mac as well as Android and iOS mobile. These platforms provide a trading experience at traders' fingertips, allowing traders to progress as a trader anywhere at any time.
MetaTrader platforms also have a variety of mainstay features, including the possibility to create, buy, and use expert advisors (EA) and scripts, One-click trading and embedded news, technical analysis tools, the possibility to copy deals from other traders, hedging positions, and VPS service support.
Another advantage provided by FBS is a deposit bonus of 100% for clients who fulfill certain requirements. The process of FSCing and withdrawing funds can be run easily and quickly. Based on clients' testimonies, each process usually takes no more than 3-4 hours, except on holidays.
Traders also have the opportunity to develop a side business when trading with FBS, namely as an Introducing Broker (IB) or Affiliate. The FBS partnership system provides partner commissions that are already in 3 level positions. Only by introducing new clients to FBS according to certain procedures, traders can earn extra income.
Traders will also get trading education experience at FBS. They have prepared a comprehensive forex course. The course consists of 4 levels: beginner, elementary, intermediate, and experienced. Traders can take courses that will turn them from newbies to professionals. All materials are well-structured. Besides, FBS provides various forex analyzes, webinars, forex news, and daily market analysis that can be accessed easily on their site.
Traders can access the FBS website with many language choices. Of course, this will increasingly provide comfort for traders. Available languages include English, Italian, French, Portuguese, Indonesian, Spanish, and others. Live chat support is also provided 24 hours 7 days a week.
In conclusion, FBS is a widely known broker among retail traders around the world. It continually grows to become a preferred broker because of flexible trading conditions that enable its clients to trade with various instruments, low deposit, and other trading advantages.
It is very easy to trade exotic pairs on FBS Broker:
- First, visit the broker's official page and press the "Open account" button.
- Next, complete a simple registration form.
- After that, choose an account where to trade exotic currencies (Cent, Standard, or Zero Spread account).
The three FBS accounts that are available for exotic currency trading support some of the most affordable trading conditions out there. For instance, the minimum deposit in the cent account starts only from $1, while the leverage can go as high as 1:3000 in Standard and Zero Spread accounts.
Things to do before trading with exotic currencies
- Choose the Right Exotic Pairs
It's better to choose the more well-known exotic pairs such as USD/TRY or EUR/TRY due to the fact that Lira is highly traded in the global sphere and has been through several economic crises. Trades can be benefited through their high volatility to get the maximum profit. - Use the Correct Strategies
Some strategies must be employed to boost the chance when trading with this currency pair. Traders can use trend-following strategies to obtain reliable quantitative data to predict price movement. Breakout trading can be applied too since it combines both technical and fundamental analysis to observe the break. But traders should be really careful and cautious to avoid false breaks. Another worth trying strategy is range trading which relies on a set range of support and resistance to speculate about the price movement. - Manage the Slippage
Due to its high volatility, the risk of slippage is also higher. Pay attention to the position by using guaranteed stops and limits.
Verdict
Trading with exotic pairs has benefits along with some drawbacks. It may offer higher profits from the volatility, but the liquidity is not quite appealing and there are higher risks to think about.
With all its risks and benefits, trading with exotic currency pairs brings a thrill for traders who want to take benefit of the myriad possibilities to open positions and earn money. However, traders should keep in mind that this pair is not for an overnight profit. Just be patient and hold them as long as it is necessary and turn them into profit when the moment is right.
FBS is a worldwide broker with a presence in more than 150 countries. More than 23 million traders and over 400k partners have chosen FBS as their preferred forex brokerage company. To provide the best customer experience, FBS organizes seminars and special events.
5 Comments
Mar 18 2023
What exactly is trading with exotic currency pairs? I've had a bad experience trading them. As a beginner with limited knowledge about Forex, I tried trading with a cent account offered by FBS. Since I only deposited $5, I chose CNH/JPY for my first trade because I thought it was unique. However, I ended up losing money and started researching why. I found out that the spread for CNH/JPY was very high and the market fluctuations were significant, as it can go very high and very low. I realized that the currency pair I chose was actually an exotic pair. If FBS offers exotic pairs, what are the benefits of trading them?
Mar 18 2023
When you trade exotic currency pairs, you have the potential to earn more money compared to major currency pairs. This is because they aren't traded as often, which can lead to bigger spreads and more potential profit if things go your way. But keep in mind, with higher potential for reward comes higher risk, since exotic currency pairs tend to be more unpredictable and volatile.
On top of that, trading exotic pairs can give you some diversification benefits. They're not usually connected to major currency pairs, so you can add them to your portfolio to lower your overall risk level.
So while trading exotic currency pairs can be exciting and profitable, it's important to know what you're doing. Make sure you have a good understanding of the fundamentals and technical analysis of the currency pairs you're trading, and always have a plan for managing your risk to minimize potential losses. Try to read this article may help you to understand more about exotic pairs : Are Exotic pairs Always Bad For Traders?
Mar 18 2023
Really dude? You are beginner and directly trade with Exotic Pairs? Hear me out. If you're just starting out with forex trading, it's probably best to stick with major currency pairs. These include the most popular pairs like EUR/USD, GBP/USD, and USD/JPY. They're easier to understand and follow, which can be helpful for beginners.
As @Anthony said in the comment before, exotic currency pairs can give you more profit. But exotic currency pairs, on the other hand, can be more complicated and risky. They're not traded as much and can have wider price swings, which means you might lose more money if things go wrong. You need to have a good handle on technical and fundamental analysis, as well as a solid risk management plan if you want to trade exotic pairs.
So, if you're new to trading, it's a good idea to start with the majors and work your way up. As you get more experience and confidence, you can try out more exotic pairs and see if they work for you.
Mar 18 2023
Since the volatility in the exotic currency pairs very high, is it posible to do the long term trading such as swing trading. I mean, if the market goes wild, the exotic currency pairs will be number 1 in fluctuating goes up and down but I dont think so if the market in the exotic currency pairs will be always happen.
In the other hand, can the exotic pairs be traded with analysis fundamental? Because I have searched about some economic event that happen in the exotic pairs but it seems the news are not very often has. and by the way, from all list of the exotic pairs that offered by FBS, which exotic pairs that maybe has more liquidity in the market and less fluctuate? Thanks before!
Mar 18 2023
With exotic currency pairs, which can be highly volatile, swing trading can be a good option for traders looking to take advantage of the big price swings that can occur. However, it's important to remember that not all markets are always active, so it's not a guarantee that there will always be big price movements in the exotic currency pairs.
If you talked about the better exotic pairs to trade. It is the best to trade USD/SGD, you can read about that currency pairs in here : USD/SGD Trading, Why and How To Profit From It