Liquidity describes how easily an asset can be bought or sold without significantly moving its price — a highly liquid market has many buyers and sellers, tight spreads, and fast execution. EUR/USD, the world's most-traded pair, is extremely liquid; an exotic pair or an off-hours session is far less so.
Low liquidity increases the risk of slippage and widened spreads, which is why volatility often spikes around session opens, closes, and major news releases.
Liquidity
How easily an asset trades without moving its price — high liquidity means tight spreads and fast, reliable execution.
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