Phantom Liquidity: How Tight Spreads Disappear When Asian Session Gaps Open
Many US retail traders assume the spreads quoted during active New York hours represent a consistent baseline across all trading windows. That assumption proves costly when liquidity evaporates during the Asia-Europe handoff, triggering spread widening, slippage, and execution failures that can devastate carefully planned positions. Understanding the mechanics behind phantom liquidity is not optional — it is a prerequisite for trading forex with any degree of precision.