Why does liquidity matter to the online trader?

Perhaps due to the following reasons:

  1. It is easy to establish and exit a position because of the depth, liquidity, and continuous, 24-hour nature of the FX market.
  2. You can react to economic and political events right away because you can get consistently tight bid/ask spreads anytime of the day.
  3. Because of the FX market’s continuous activity (24-hour), trading is more orderly.

Any other ideas?

I know this is an old thread, but that is a simple question. To some traders you can make money in a flat market, and you can, but liquidity provides the ups and downs, waves and momentum that is needed for strong trending. My view!