Volume & Liquidity Terms

The interbank market is the decentralized network where major banks and prime brokers quote two-way currency prices to one another, establishing wholesale spreads that flow down to retail brokers and ultimately dictate execution quality for everyday traders.

Liquidity is how easily you can buy or sell an asset at a stable price. High liquidity in forex means tight spreads, better execution, and minimal slippage.

Market depth measures the volume of buy and sell orders resting at each price level, signaling how much size the market can absorb before price shifts materially.

The order book lists resting buy and sell orders at different price levels, revealing where liquidity may support or resist price although forex books remain fragmented across venues.

OTC forex trading occurs on decentralized dealer networks where banks and brokers quote prices directly, enabling 24-hour access but making execution quality dependent on counterparties.

Tick volume counts how many times price changes during a period, offering a reliable proxy for trading activity in the decentralized forex market.

Volume measures the total amount of currency traded for a specific pair within a given period, indicating market activity levels and the conviction behind price movements.

Volume profile maps traded volume at each price level, revealing value areas, rejection zones, and the point of control that guide support and resistance.