#Liquidity101 refers to the ease with which an asset can be bought or sold without significantly affecting its price. A market with high liquidity has many buyers and sellers, allowing for quick transactions at fair prices. In contrast, in a market with low liquidity, prices can be more volatile and trades can be difficult to execute. In trading, liquidity is key to minimizing slippage and ensuring good execution. Factors such as trading volume, the number of participants, and market depth influence liquidity. Understanding it is vital for trading efficiently and with less risk.