It is true that uncertainty is high with exotic currency pairs but if one can learn how to track those pairs and use them for trading then it can be more profitable.
Exotic currency pairs come with various risks. One should avoid trading in these as these are hardly tracked by the market analysts and have a very weakresearch background.They also have huge bid ask spreads, which again makes for a big reason to avoid trading in them. Exotic currency pairs are highly linked to the political and economic conditionsof the country to which they belong, which increases the uncertainty factor associated with them and makes them unstable. Given all these risk factors, the cost of executing any transaction in them is very high. All in all, it is not safe to trade in these currency pairs.
You can see that the transaction costs (spread and swap) of "cross currency pairs" are much bigger than "major currency pairs". And the transaction costs of "Exotic currency pairs" are even higher than "cross currency pairs". That is reason!
I believe that is the liquidity which defines earning profit in forex trading and EURUSD is more liquid i guess.
Most people avoid exotic currencies because they are much more difficult to handle compared to stronger currencies, you should have a previous study before trading with them too extensive, for example there is a trader named Adriano Aaron Caruso who analyses the performance of all the exotic currencies that exist in the markets, his study is very complete as he has traveled to countries like Russia and Norway to expand his knowledge, This shows that if it is advantageous but not everyone can enter and operate so easily it is impossible for those who do not know the market perfectly.
What if we will focus on earning swaps instead or scalping. We have to take advantage of exotic pairs not explore their weak sides!
The volume we use for trading is also the part it. Everything we learn with experience and it all takes times.
Do you know where I can find indicators of trading volume for FX MT4 platform? Btw I use Hotforex account.
The recommendation is that if you don’t know well how they work, you avoid them and it is also normal that many of the experts prefer not to mess with these pairs because they are very complicated to understand for a lot and you need a very extensive preview. Personally I have been working with exotic peers for several years and I have studied in Norway and Russia on the operation of markets such as NOK and RUB, and I have been trading in Forex for a long time, Today I am dedicated to the design of automatic services of exotic pairs and I can tell you that not everyone can get into something like this.