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💧 #Liquidity101 – What Does Liquidity Really Mean in Finance? 📈

When we talk about liquidity, we're talking about how quickly and easily an asset can be converted into cash without affecting its market price.

Here’s a quick breakdown:

🔹 High Liquidity – Assets like stocks or fiat currencies can be sold quickly with minimal price impact.

🔹 Low Liquidity – Assets like real estate or rare collectibles take longer to sell and may require price adjustments.

Why does liquidity matter?

✅ Easier to enter and exit trades

✅ Less price volatility

✅ Better pricing and tighter spreads

✅ Lower trading risk

In crypto and stocks, liquidity can make the difference between a profitable trade and a missed opportunity.

💡Tip: Always check the trading volume and order book depth to assess liquidity before investing!

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