Why are exotic currency pairs to risky for beginner forex traders?
Exotic currency pairs are often considered risky for beginner forex traders due to several factors. Firstly, exotic currency pairs involve currencies from emerging or less frequently traded economies, which can be more volatile and subject to unpredictable market movements.
The limited liquidity in these pairs may result in wider spreads, making entry and exit of trades more challenging. Additionally, exotic currency pairs may lack sufficient historical data and have less established trading patterns, making it harder to perform accurate technical and fundamental analysis.
If you are a newbie, strive to focus on major and minor currency pairs, which are more liquid, widely traded, and offer better market stability, providing a more suitable environment for learning and developing your trading skills.
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