Foundations

What is market liquidity?

Liquidity is simply how many willing buyers and sellers are active. Deep liquidity means tighter spreads and smoother moves. Thin liquidity means slippage, whipsaws and surprise wicks.

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When liquidity is deep

London and New York overlap, and the hours around major data releases, generally offer the deepest liquidity in FX.

When liquidity is thin

The Asian session for non-JPY/AUD/NZD pairs, holidays, and the hour or two around the daily rollover are notably thinner. Reduce size or stand aside.

Educational content. MySmartFXSignals provides decision-support and education. Nothing here is financial advice or a trading recommendation. Trading FX carries significant risk of loss.

Related guides

How the forex market worksA plain-English tour of the FX market: who trades it, when it opens, and why prices move around the clock.
What actually moves currency prices?Interest rates, inflation, employment, growth and sentiment — the real drivers behind every meaningful FX move.
Understanding currency pairsBase and quote, majors, minors and exotics — how currency pairs are built and why one currency always strengthens as the other weakens.

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