Liquidity

In plain English

A liquid market absorbs large orders with small price changes. An illiquid one lurches, so the same order size costs you more.

Example

The same order that barely moves price at midday can move it several percent overnight in a thin market.

See also

• Market depth
• Slippage
• Order book

Used in these lessons

• How Crypto Markets Differ
• Liquidity and Order Flow Basics
• Stop-Losses and Invalidation
• Support and Resistance
• Volume and What It Confirms
• What Is Trading, Really?
• Costs of a Round Trip
• Choosing a Market to Learn On
• Demo Accounts and Paper Trading