Liquidity Concepts

Market liquidity

Major pairs are highly liquid during main sessions, so large orders can usually be filled with small price impact and tight spreads. Liquidity thins out around rollover, holidays and weekends, so spreads widen and slippage becomes more likely.

"Liquidity pools" in chart analysis

Some traders describe areas above obvious highs and below obvious lows as liquidity pools, because many stop-loss and pending orders tend to cluster there. Price sometimes moves briefly through these areas before reversing.

This is a way of interpreting charts, not a proven rule. Use it alongside sound risk management, and avoid placing stops exactly where everyone else does.