#Liquidity101
- *Definition*: Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price.
- *High Liquidity*: Assets can be quickly bought or sold with minimal price impact (e.g., major currencies, stocks).
- *Low Liquidity*: Assets may take time to buy or sell, and transactions can significantly impact prices (e.g., some altcoins, penny stocks).
- *Importance*: Liquidity affects trading costs, volatility,
[6/6, 2:26 PM] Meta AI: #Liquidity101:
- *Definition*: Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price.
- *High Liquidity*: Assets can be quickly bought or sold with minimal price impact (e.g., major currencies, stocks).
- *Low Liquidity*: Assets may take time to buy or sell, and transactions can significantly impact prices (e.g., some altcoins, penny stocks).
- *Importance*: Liquidity affects trading costs, volatility, and the ability to enter or exit positions.
In essence, liquidity determines how easily you can buy or sell an asset at a fair price.