In Forex Trading the word Liquidity refers to the level of market interest — the level of buying and selling volume — available at any given moment for a particular asset or security. The higher the liquidity, or the deeper the market, the faster and easier it is to buy or sell a security.
From a trading perspective, liquidity is a critical consideration because it determines how quickly prices move between
trades and over time. A highly liquid market like forex can see large trading volumes transacted with relatively minor price changes. An illiquid, or thin, market tends to see prices move more rapidly on relatively lower trading volumes.
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Mon, Jun 7, 2010
Forex Trading