#TradingPairs101

#Liquidity101

"Liquidity 101: The Lifeblood of Markets

Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price. High liquidity means:

1. *Tighter bid-ask spreads*: Less difference between buy and sell prices.

2. *Faster execution*: Trades are filled quickly and efficiently.

3. *Less price volatility*: Prices are more stable.

Low liquidity, on the other hand, can lead to:

1. *Wider spreads*: Higher trading costs.

2. *Slippage*: Trades are executed at unfavorable prices.

3. *Increased volatility*: Prices can fluctuate wildly.