Majors, Minors and Exotics
Major pairs are the most commonly traded currency pairs and always traded against the USD.
Minor pairs can be understood when traded as cross currency pairs, excluding the USD. For example, GBP/EUR. In total, there are 14 minor pairs.
Exotic pairs are a thinly traded currency that are illiquid, lack market depth and trade at low volumes. Trading an exotic currency can be expensive, as the bid-ask spread is usually high. These currencies come from developing countries having moderate economic and trading relationships. The penetration of these pairs in Forex market is very low and often moves on changes in the political instability, and depreciates at a rapid rate.