Liquidity is a fundamental element in the trading world, and it refers to the ease of buying or selling assets without significantly impacting the price. A high liquidity market, such as Bitcoin or Ethereum, allows for quick execution of trades at fair prices. On the other hand, low liquidity may lead to sharp fluctuations and difficulty in exiting trades. Liquidity also provides a more stable and flexible trading experience, especially in decentralized markets (DEX). It is important for traders to understand liquidity before entering any trade, as it directly affects profitability and risk. Simply put, the higher the liquidity, the greater your chances of trading safely and effectively.