Comparatively to any other financial market, the FX market has the largest notional value of daily transactions. Since this provides the most liquidity, even large orders for currency trades can be filled quickly and with minimal price fluctuations. As a result, trading spreads will be narrower and pricing will be more efficient, decreasing the chances of price manipulation and anomalies. Market volatility during opening and closing hours, as well as flat prices in the afternoons, do not pose a problem for traders. During non-stop trade, if big events are expected, we will see similar price patterns (of high, mid, or low volatility).

Liquidity refers to the ease with which assets can be bought or sold in the market without causing significant price changes. When liquidity is plentiful, markets function efficiently, with tighter bid-ask spreads and minimal slippage. This is especially true in the forex market, where major currency pairs like EUR/USD or USD/JPY often exhibit high liquidity due to the significant trading volumes they attract. Plentiful liquidity benefits traders by ensuring smoother trade execution and better price stability, making it ideal for scalpers and intraday traders. However, during periods of market stress or outside major trading sessions, liquidity can diminish, increasing volatility and risk. Understanding liquidity dynamics is crucial for timing trades effectively and managing risk in any financial market.