What Is Liquidity?
Liquidity refers to how easily an asset can be bought or sold without significantly moving its price. It directly affects spreads, slippage, and how reliably an EA can enter and exit trades.
Why It Matters for EAs
- Wider Spreads: Low-liquidity periods (e.g., market open, major news) often widen spreads, affecting EA entries.
- Slippage Risk: Thin liquidity increases the gap between expected and actual fill prices.
- Session Timing: Trading during overlapping major sessions (e.g., London/New York) typically offers deeper liquidity.