Liquidity

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.