Forex Currency Liquidity

Forex Liquidity

The liquidity section provides rough estimates of the trading activity in the forex market.  It allows you to understand and view current liquidity and liquidity in previous sessions, in real time.  Higher liquidity usually means better spreads as more transactions are being made.  The liquidity calculation takes into account many brokers and top 10 traded currencies to calculate the liquidity per each minute for the last 48 hours.  You can use the chart zoom in feature to zoom/select a custom timeframe and have the liquidity automatically calculated.  The average liquidity of the past 24 hours is used as a 100% liquidity basis for percentage calculation (number of ticks divided by average spread).  For example, a 110% reading will tell you that the current liquidity is 10% above the last 24 hours average liquidity. 

Since forex is an “over the counter” market, there is no official data about volume and open interest, so liquidity can be estimated by the number of price ticks and spreads; as an example, a high amount of price ticks and low spread will signify a high liquidity, while a low amount of price ticks and a high spread will signify a low liquidity. .