The Best Brokers to Trade Exotica
While most Forex brokers and traders deal exclusively with major currencies, some professionals move away from a beaten path and take advantage of exotic pairs, whose profit-yielding potential is often significantly underestimated. Let us speak about brokers who defy the competition by offering a wider range of tradable currencies.
What are exotic currency pairs and why they are worth considering?
An exotic currency pair is a variety of currency pairs traded at financial markets. Such a pair consists of one major currency (EUR, GBP, USD, Australian dollar, New Zealand dollar, Swiss franc, Japan yen) and one minor currency. A minor currency is a national currency of a third world country like Brazil, Mexico, Russia to name a few.
Traders and brokers generally do not like trading with exotic pairs because their behavior is hard to predict, while the demand for such pairs is relatively small.
However, non-traditional Forex pairs have some undeniable advantages:
- High volatility. Average daily volatility of exotic pairs is higher compared to traditional pairs. This is so because developing countries have their own algorithms to calculate interest rates, which are different from those in banks of Europe and the USA. The political instability of countries whose national currencies belong to the exotic group is the main drive of sharp price fluctuations.
- Colossal intraday movements. Despite the risks common to markets with high volatility, potential earnings can cover all expenses. For example, daily swings of major currencies range from 150 to 550 pips, and from exotic currency pairs you can expect a range of 1000 or even more pips per day.
The list of exotic currency pairs is extensive. Some of them include:
- AED – Arab Emirates Dirham
- BRL – Brazilian Real
- CNY – Chinese Yuan
- CZK – Czech Koruna
- EGP – Egyptian Pound
- HKD – Hong Kong Dollar
- HUF – Hungarian Forint
- ILS – Israeli Shekel
- INR – Indian Rupiah
- ISK – Iceland Krona
- KRW – Korean Won
- MXN – Mexican Peso
- PHP – Philippine Peso
- RUB – Russian Ruble
- SAR – Saudi Arab Riyal
- SGD – Singapore Dollar
- TRY – Turkish Lira
- TWD – Taiwan Dollar
- ZAR – South African Rand
Brokers offering a greater assortment of currency pairs
Renesource Capital supports over 100 currencies including less preferred ones such as KZT, RUB, SEK, MXN, NOK, RON, NZD, PLN, and lots more, not to mention 400+ other tradable assets. Based in Riga, Latvia, the broker is focused on providing investment services in the field of financial risks hedging. Renesource Capital has been operating since 1998 and made its online presence in 2009, when the broker signed an agreement with MetaQuotes Company about using the MetaTrader 4 trading terminal.
Capital Markets offers its clientele 86 currency pairs with a solid share of exotica along with 2858 CFDs and other sought-after Forex instruments. A robust ECN broker with headquarters in Hong Kong, Capital Markets provides traders with direct access to global financial markets in the setting of exceptional trading conditions and competitive spreads. The usage of top-notch trading software (MetaTrader5) and professional expertise in investment portfolio management make Capital Markets one of the most trusted brokerages for today.
RoboForex is an international broker which supports nearly 40 currency pairs together with 9 400 other assets including crypto and crypto indices. The broker relies on MetaTrader 4 and MetaTrader 5 trading platforms, supports CTrader и RTrader apps, and also features a proprietary web-terminal available for a free trial.
Tickmill also stands out of the crowd with their over 60 currency package. Their mission is to provide both small-scale and institutional customers from around the world with favorable trading conditions and the opportunity to fully harness their trading skills. The brokerage was created by traders for traders. Their team members have accumulated professional experience since the 1980s and have been successfully performing in all major financial markets from Asia to North America.