#Liquidity101
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📘 Liquidity 101 – Liquidity Simplified
Liquidity is how easily an asset (like stocks or currencies) can be converted to cash without a significant impact on its price. If you can sell the asset quickly and at a price close to the market, then that asset is considered "liquid".
In financial markets, liquidity is very important as it affects the speed of executing trades and the costs of trading. For example, major currencies like the dollar and euro have high liquidity, while some rare currencies or stocks may have low liquidity.
The higher the liquidity, the lower the risk of entering and exiting the market. That's why, before you trade, ask yourself: is the market I'm entering liquid enough? 💧📉
#Trading #Learn_Trading #Liquidity #Liquidity101 #Financial_Basics
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