Unlike major industrialized currency portfolios, many emerging market assets made significant gains over the course of the past year, with some funds producing returns as high as 200 percent.

With managers increasing their investment into countries as far flung as Singapore and South Africa, a new demand has surfaced for "regional" currencies. This trend has opened a new world of trading in currency pairs involving the South African rand (ZAR), Singapore dollar (SGD), Hong Kong dollar (HKD), Mexican peso (MXN), and even the Norwegian krone (NOK). Once strictly reserved for institutional participants, these currencies are now available to retail traders.

However, although they have many similarities to the major currency pairs, emerging-market pairs (EM) have some unique characteristics and considerations which potential traders should understand before attempting to trade them.