Exotic pairs
a.k.a. Exotics
Pairs that match a major currency with one from a smaller or emerging economy, such as USD/TRY or EUR/ZAR.
An exotic pair puts a major currency up against a less widely traded one, like the Turkish lira (USD/TRY), South African rand (USD/ZAR) or Mexican peso (USD/MXN).
Thin liquidity means wide spreads, so you start every trade further in the hole. Prices can also gap and spike on politics or a surprise move by a central bank. Big swap charges for holding overnight are common too.
Ignoring the cost of entry. On some exotics the spread alone can eat a chunk of a small account before the price even moves.
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