Understanding Currency Pairs: Majors, Minors, and Exotics
Currency pairs are the foundation of forex trading. Learn the difference between majors, minors, and exotics. Majors, minors and exotics — behaviour, spreads.
What Is a Currency Pair?
Forex is always traded in pairs — you buy one currency while selling another. EUR/USD means you're buying EUR and selling USD. The first currency is the base, the second is the quote. The price shows how many units of quote currency buy one unit of base.
Majors
The 7 major pairs all include USD: EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, USD/CAD, NZD/USD. Majors have the tightest spreads (0.5-1.5 pips), highest liquidity, and are best for beginners. EUR/USD is the most traded pair globally.
Minors (Crosses)
Minor pairs don't include USD: EUR/GBP, EUR/JPY, GBP/JPY, AUD/JPY, EUR/AUD. Spreads are slightly wider (1.5-3 pips) but still liquid. EUR/GBP and EUR/JPY are popular for diversification away from USD.
Exotics
Exotic pairs include a major currency and an emerging market currency: USD/TRY, USD/ZAR, USD/MXN, EUR/TRY. Spreads are very wide (10-50+ pips), liquidity is low, and volatility is high. Only for experienced traders who understand the risks.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70-80% of retail investor accounts lose money when trading CFDs. Backtesting does not guarantee future results. Always consider whether you can afford the potential loss of your capital.