#CurrencyPairPrediction The general correlation between higher volume and higher liquidity in forex stems from the increased participation of buyers and sellers. When more traders are actively involved, there are more orders available on both sides of the market. This abundance of interest at various price points creates a deeper market, capable of absorbing larger trades with less impact on the price. Think of a busy marketplace: many buyers and sellers readily available make it easy to exchange goods at the prevailing price. Similarly, in forex, high volume signifies a bustling market where finding a counterparty for a trade is easier, leading to tighter spreads and reduced slippage – hallmarks of high liquidity. This robust activity often attracts even more participants, creating a positive feedback loop that further enhances liquidity.