#Liquidity101

#Liquidity101, explaining the concept of liquidity in trading and finance:

#Liquidity101: Why It Matters in Markets

Liquidity refers to how easily an asset can be bought or sold without affecting its price. In highly liquid markets—like major stocks or Bitcoin—you can trade quickly at stable prices. Illiquid assets, like rare collectibles or small-cap tokens, may be hard to sell fast or at fair value. High liquidity means tighter spreads, less slippage, and more efficient trading. In crypto, decentralized exchanges often rely on liquidity pools—user-funded reserves that enable trades. Without enough liquidity, even the best trading strategy can suffer. Whether you're in stocks, forex, or DeFi, understanding liquidity helps you gauge risk, spot opportunities, and avoid costly surprises.

Would you like a follow-up on liquidity pools or slippage next?