Exotic currencies.

You've probably often heard the expression "exotic currencies." Images of distant islands, sand, and palm trees immediately come to mind, but in reality, these currencies rarely have anything to do with those islands.

Exotic currencies are illiquid or unpopular currencies with a limited circulation or other restrictions on circulation. Therefore, most unpopular currencies are often classified in this category.

Examples of exotic currencies include the Russian ruble, the Israeli shekel, the Hong Kong dollar, the Polish zloty, the Turkish lira, and some other currencies that are rarely used in financial transactions.

This does not mean that such currencies are not involved in speculative trading; one example is the recently increased trading of the Russian ruble .

But this is more the exception than the rule; exotic currencies are rarely used in trading due to a number of reasons:

• Extremely high spreads, sometimes reaching up to 100 points for such currencies; it is clear that it is difficult to return the consolidated commission in this situation, even with long-term transactions.

• Lack of comprehensive information: it is much easier to obtain information on the US dollar or the Euro than to search for news about events in the Argentine economy.

• Lack of technical assistants: when trading, you have to use only universal technical analysis tools , while specialized advisors are out of the question.

• Limited analytics: various analytical agencies pay virtually no attention to exotic currencies, so finding a sensible review or forecast is quite difficult.

• Not suitable for short-term trading due to high spreads; the trade must be maintained for a considerable period of time for the profit to cover the spread .

Despite these drawbacks, there are exceptions among exotic currencies. For example, the Russian ruble, as its popularity grows, gradually begins to narrow its spread, significantly simplifying trading and leading to an ever-increasing number of participants.