#Liquidity101

Liquidity is the ability of an asset to be converted into cash quickly and without a significant impact on its price. In the trading market, liquidity refers to the ease of buying or selling assets such as currencies, stocks, or cryptocurrencies. The higher the liquidity, the easier it is to execute trades at fair prices without delays or significant fluctuations. High liquidity markets provide lower spreads and faster execution, benefiting traders, especially in day trading or fast trading. Conversely, illiquid markets may lead to sharp fluctuations or difficulty in exiting a trade. Therefore, liquidity is an important indicator of market health and stability, and professional traders consider it before entering any trade to achieve the best possible performance.