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Trading Glossary

Liquidity

Basics

What it means

How easily you can buy or sell an asset without moving its price. High liquidity means large orders fill with little price impact.

Example

EUR/USD is so liquid that a $1 million order barely moves the price. The same order in a small altcoin might push the price up 15% before it fills.

Mistake beginners make

Beginners buy low-liquidity coins because they look cheap and "move a lot," then cannot exit without crashing the price against themselves.

Related terms

  • Volume — The total number of shares, contracts, or coins traded during a period. It shows how much …
  • Slippage — The difference between the price you expected and the price you actually got. It happens w…

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