🔥WHAT IS LIQUIDITY? (LEVERAGE TRADIN)🔥

DEFINITION:

DEFINITION:

Liquidity, in the context of trading, refers to the ability to buy or sell an asset quickly and at a stable price. It measures the market's ability to absorb a trade without significantly affecting the asset's price ¹ ² ³ ⁴. Here are some key points to consider:

👉 High liquidity means that there are many buyers and sellers actively trading the asset

👉 Trades can be executed quickly and at a fair price in high liquidity markets

👉 The spread between the bid and ask prices is narrow in high liquidity markets

👉 Low liquidity, on the other hand, indicates fewer market participants are trading the asset

👉 In low liquidity markets, trades may take longer to execute and at a less favorable price

👉 The bid-ask spread is wider in low liquidity markets

👉 Liquidity affects the ease of entering and exiting trades

👉 It influences the price volatility of the asset

👉 It impacts the overall trading costs.