See definition from beginner lesson below. I ask, what happens to liquidity if the amount of active traders Buying/Selling a currency is greater than its total volume?
Example 5000 traders buy/sell $1 USD/GPB
Versus 5 traders buy/sell $10,000 AUD/JPY
So technically the AUD/JPY has more liquidity?
“In forex, it’s based on the number of active traders buying and selling a specific currency pair and the [volume]being traded.
The more frequently traded something is, the higher its liquidity.”