What are Low Liquidity Periods?

Low liquidity periods refer to times in the trading day or week when the market has fewer active participants, leading to wider spreads, slippage, and unpredictable price movement. 

Common Low Liquidity Periods:

1. Market Open (First 5–15 Minutes)

• Forex: Sunday/Monday open at 22:00 UTC

• Major U.S. indices like US30, NAS100, and S&P500 open at 13:30 UTC

• Why?: Orders pile up from the weekend or overnight gaps, creating volatility and thin order books.

2. Market Close (Last 5–15 Minutes)

• U.S. indices close at 20:00 UTC
  Why? Liquidity drains as traders close positions, causing end-of-day volatility and potential price swings.

3. Before/After Major News Events

• Examples: NFP, FOMC, CPI — often released around 12:30–14:00 UTC
  Why?: The market slows before key releases, spreads widen, and execution becomes risky.

4. Asian Session (Early Hours)

• Typically 22:00 – 00:00 UTC
  Why?: Limited market activity as major financial centers like London and New York are closed, reducing volume and increasing spread sensitivity.