It goes like this – the situation in the market influences every trade that is put down for a certain direction. And that is quite common that the situation in the market is changing rapidly. That is where one has to adapt to the new situation and look for the new trading scenario that is going to be completely different from the previous variants of the trades.
Trading scenario can’t be developed beforehand and has to be made up and changed on the spot.
Liquidity is a term that describes the speed with which the asset can be sold or bought with the current price in a market without its price being affected by the selling-buying process. It also refers to the speed with which the market itself allows the assets to be bought and sold without the change in price.
Volatility is a special measure that describes a degree of variation of trading price for a certain asset in a certain period of time that is defined by the standard deviation and logarithmic returns. Volatility can be measured by these standard deviations just as well as by the difference between returns from the same asset.
Sometimes swings of the prices in the different direction are also called volatility.
Spread is the space between buy and sell. It is the margin of profit for a any exchange company online or in your exchange arround the corner.
Example for spread:
Eur/usd
Buy is 1.1516
rate: 1.1514
Sell is 1.1512
Your buying or selling spread is 2 pips
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