#TradingMistakes101 Tradinrefers to how quickly and easily an asset can be converted into cash without affecting its market price. Assets like cash and bank deposits are highly liquid because they can be used immediately for transactions. On the other hand, assets like real estate or machinery are less liquid as they take time to sell. In business and finance, liquidity is important because it ensures that a company can meet its short-term obligations. A liquid market allows investors to buy or sell assets quickly. Low liquidity can lead to financial stress, so maintaining adequate liquidity is vital for economic stability.