#Liquidity101

Liquidity is a vital indicator in financial markets that determines how easily an asset can be bought or sold at a stable price without significantly affecting its market value. Highly liquid assets, such as major currency pairs or stocks of large companies, allow for the quick execution of large orders with minimal slippage. Conversely, low-liquid assets can lead to significant price fluctuations even with small trades, complicating entry and exit from positions. For traders, liquidity is key as it affects the speed of trade execution and potential profits or losses.