#Liquidity101
💧 #Liquidity101: What Does "Liquidity" Really Mean in Trading?
In simple terms, liquidity is how easily you can buy or sell an asset without drastically changing its price.
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🔁 High Liquidity = Smooth Trading
Lots of buyers & sellers
Tight bid-ask spreads
Fast order execution
✅ Examples: BTC, ETH, major stocks
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🥶 Low Liquidity = Slippage Risk
Fewer participants
Wide bid-ask spreads
Harder to enter/exit trades without affecting price
⚠️ Common in small-cap tokens or new projects
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Why It Matters:
Better liquidity = better price execution
Poor liquidity = more volatility and risk
Liquidity is key for scaling your trades safely
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💡 Pro Tip: Always check volume and order book depth before making big trades—especially on DEXs.
