Types of currency pairs
Not all tools for making a profit on Forex are the same; conventionally, currency pairs can be divided into three groups, each of which
has its own characteristics.
Knowing them, you can choose the trading tool that best suits your needs and will fully suit your strategy.
Forex currency pairs are divided depending on their popularity and the size of the spread; these two parameters play a decisive role.
Group 1, the most popular.
So to speak, the leaders in Forex trading volumes are EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF, USD/CAD.
Group 2, average popularity.
These currency pairs are no longer in great demand, but the volume of transactions carried out on them still accounts for about 25% of the total market share.
The main participants in this group were EUR/GBP, EUR/JPY, EUR/CAD, EUR/AUD, EUR/CHF, AUDJPY and some others currency pairs.
The spread for this group is already increasing significantly from 1 to 7 points.
Group 3, exotic.
Despite the name, it includes pairs such as USD/RUB, USD/LTL, USD/MXP, USD/NOK, USD/PLN, EURCZK, EUR/HUF and similar trading instruments. This is not to say that such options are not at all popular on Forex, but the volume of transactions involving them is relatively small.
Low liquidity is the reason for the high spread - from 4 to 80 points.
Some Forex dealing centers and do not work with such trading tools at all.