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What is the difference between liquidity and volatility?

April 26, 2017liquidity volatility

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What is the difference between liquidity and volatility?

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Volatility is a statistical measure of a market’s price movements over time. Volatility is high if prices change dramatically in a short period of time. Liquidity is a market condition that allows large transactions to be absorbed by the marketplace with little or no effect on price stability. With a daily trading volume that is 50x larger than the New York Stock Exchange, there are always broker/dealers willing to buy or sell currencies in the FX markets, thereby assuring liquidity.