#Liquidity101: Understanding the Lifeblood of Financial Markets** đ§đ°
Whether you're trading stocks, crypto, or forex, **liquidity** is a crucial concept that can make or break your investments. But what exactly is liquidity, and why does it matter? Letâs break it down!
### **What Is Liquidity?**
Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price. **High liquidity** means there are plenty of buyers and sellers, making transactions fast and efficient. **Low liquidity** can lead to slippage, wider spreads, and difficulty exiting positions