why in forex we have to trade only major currencies?

nayani · (#1 (**permalink**))

Hai,

I am a beginner to forex.I got a doubt.Pls explain it..Why in forex we have to trade only major currencies,like EUR/USD etc... and not one major currency and one minor currency like USD/IND..

Nancy Cheah · (#2 (**permalink**))

I believe it's the spread.

Moreover, it's also the volatility.

Regards.

nayani · (#3 (**permalink**))

Thank u very much

Nancy

Pharaoh · (#4 (**permalink**))

It's also up to the individual brokers. Some have a LOT of exotic pairs, and some have only the majors.

One thing I have noticed. If you have a European broker, the spreads on exotic (or not so exotic) EUR/xxx pairs are often lower than with a US broker. I really should check to see if a Japan-based broker offers lower spreads on some of the more interesting JPY crosses.

You can trade anything your broker offers, but Nancy is correct that exotics have higher spreads (sometimes incredibly high spreads) and can also be very volatile. They also have lower liquidity which can lead to higher slippage or requotes entering and exiting the trade. Still, some people do trade them profitably, but it's definitely not the same as trading the EUR/USD or GBP/USD.

nayani · (#5 (**permalink**))

thank u pharoh

sam111 · (#6 (**permalink**))

Quote:

Originally Posted by nayani

Hai,

I am a beginner to forex.I got a doubt.Pls explain it..Why in forex we have to trade only major currencies,like EUR/USD etc... and not one major currency and one minor currency like USD/IND..

because some currencies are liquid like USD, EUR ,AUD and JPY etc. why do we chose Liquidity, every currency pair is not liquid. and where there is liquidity ,there are opportunities. Non liquid currency pair can be very dangerous to trade. it si very to trade in liquid currency.

Nancy Cheah · (#7 (**permalink**))

Currency trading by itself is already a dangerous game.

It's not as easy as it seems.

If it's really so easy, then everyone in this world are already currency traders.

Regards.

sam111 · (#8 (**permalink**))

Quote:

Originally Posted by Nancy Cheah

Currency trading by itself is already a dangerous game.

It's not as easy as it seems.

If it's really so easy, then everyone in this world are already currency traders.

Regards.

Currency Trading is the easiest thing and Making Money through forex market is the toughest thing in this world. so we must be cautious about forex trading.