Traders from other markets are drawn to forex because of its extremely high level of liquidity. Liquidity is crucial as it allows traders to get into and out of a position with ease 24 hours a day, five and a half days a week. This allows large volumes of trading to enter and exit the market without the large price fluctuations that would occur in a less liquid market. A lack of buyers means that you will never get into a position to sell. Liquidity can vary from one trading session to another and from one currency pair to another as well.

EUR/USD and USD/JPY are the most traded currency pairs, accounting annually for approximately 41% of all forex trades. Given the size of the overall forex market, this is a remarkable percentage. The diagram below also reveals that most of the pairs are USD crosses.

Forex trading volume is dominated by the US Dollar to the tune of 85%. The Euro takes nearly 40% of trading volume, ahead of the third-place Japanese Yen, which takes almost 20%. Forex traders can concentrate their attention on a select few major pairs when volume concentrates mostly on the US Dollar, Euro, and Yen. The greater liquidity found in the forex market also lends itself to long-term, well-defined trends that lend themselves well to technical analysis and charting methods.