Bid / Ask
The
Bid is the price that the broker pays to buy from you if you are selling
The
ask is the price that the broker charges you if you are the one buying
"A
customer Buys at the ask and Sells at the Bid"
The
bid/ask it's the price difference you have on your broker to accept the
exchange rate.
Spread
Difference
between the bid and ask. it represents the dealer's profit.
Volatility
The
volatility of currency e is how much the price is moving over a certain period of
time.
A
higher volatility means that their currency's value can potentially be spread out over a larger range of values
this means that the price of the currency can change dramatically over a
short time period in either direction. At lower volatility means that their
currencies values do not fluctuate dramatically but changes in value
The
higher volatility the more opportunities you have to profit from the market but
too much volatility and then it can be dangerous
There
is a balance to find between too much volatility and not enough volatility.
A
day trader or swing trader is highly interested in volatility because without
volatility there is not much movement in the currency pair you are looking at
and therefore not many opportunities for profit from the moment.
Ability
to buy or sell an asset in large quantities without affecting the price levels.
Cash is the most liquid asset.
So
liquid is in easy words how much money is involved in the transaction. The
more liquid a pair is the safer it is how so.? it means that if someone with a
lot of money is pulling out or jumping in the currency pair, it will not affect
the overall price of it.
If
you are watching a highly liquid currency pair, if someone big is getting out
or getting in, it will affect a lot the price of the currency pair there making it very dangerous for other traders.
So
liquidity is something we want. liquid markets are markets around National
days, bank holidays, Christmas time, when a lot of traders are out, and therefore
if anyone with a lot of money in deciding to jump in a trade or get out of
their position he will have the ability to move the market a lot bigger than if
it was more liquid.