Choose liquid currency markets over illiquid markets

May 07, 2:43 pm
Orbex Trading TIP6

The advantages of trading in liquid currency markets are considerable, which is why most forex traders prefer to operate in them. For forex traders, market liquidity in a currency pair means the degree to which large transactions can be executed without moving the market significantly, how tight dealing spreads are, and how many market makers participate in the market. Although illiquid markets can offer some interest trading opportunities for longer term traders that are not as affected by transaction costs, trading in liquid currency markets generally mean lower transaction costs for more active traders. Higher liquidity also means that the forex market will be less susceptible to order slippage since exchange rate movements will usually be smoother without many gaps, other than those that sometimes occur over weekends when important forex news occurs.

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