#Liquidity101
Liquidity measures how easily an asset can be bought or sold without impacting its price. High liquidity means many buyers and sellers, making trades smooth. Low liquidity leads to price swings and trading difficulties. In trading, liquidity is key for price stability, ease of trading, and market efficiency. Assets with high liquidity are less volatile, while those with low liquidity are more unpredictable. Understanding liquidity helps traders navigate markets effectively. It's essential for making informed decisions and avoiding potential losses. By recognizing liquidity's impact, traders can adapt their strategies to suit market conditions and achieve better outcomes. Liquidity matters.