The most liquid currency pairs are preferred by 61% of Forex traders, while only 12% choose exotic pairs. This is according to a new study by Traders Union.
In the study “Do Traders Prefer Major or Exotic Forex Pairs?”, Traders Union analysts examined which currencies traders prefer, what influences their decisions, and which instruments deliver the best results.
According to the findings, 27% of respondents prefer minor currency pairs, while EUR/USD remains the most popular individual pair. It is the most frequently traded pair for 29% of respondents. GBP/USD ranks second at 17%, followed by USD/JPY at 15%. Together, these three pairs account for 61% of responses regarding the most frequently traded currency pair.
Low spreads matter more than high volatility
When choosing a currency pair, 34% of traders prioritize trading costs. Another 22% focus on volatility and potential profits, while 17% prefer familiar currencies. Liquidity and execution quality were identified as the most important factors by 12% of respondents.
The study also revealed gaps in traders' understanding of trading costs. Only 38% of respondents correctly recognized that trading exotic currency pairs can involve wider spreads, slippage, and changing liquidity conditions. The remaining 62% either misunderstood these risks or were unsure of the answer.
Higher trading costs were cited as the main obstacle to trading exotic currencies by 31% of respondents. Another 24% pointed to unpredictable volatility, while 17% admitted they were not sufficiently familiar with these currencies.
Do exotic currencies generate higher profits?
Despite the additional risks, 29% of traders believe exotic currency pairs offer greater profit opportunities. However, 36% believe profitability depends primarily on trading strategy and market conditions. Another 21% favor major currency pairs.
Meanwhile, 49% of respondents reported that major currency pairs had delivered their best trading results over the previous 12 months. Minor pairs accounted for 20% of responses, while exotic pairs were selected by just 14%. The researchers emphasized that these findings are based on traders' self-assessments rather than independent verification of their account profitability.
In addition, 47% of respondents would prefer to trade lower-cost currency pairs even if alternative instruments offered larger price movements. Only 21% are willing to accept substantially wider spreads for the opportunity to profit from higher volatility. Another 19% choose between these instruments depending on market conditions.
As a reminder, only one-third of traders verify broker licenses.
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