Can you get in and out easily?
Liquidity is how quickly an asset can be bought or sold without moving price sharply. High liquidity (major forex pairs, large-cap stocks, BTC/USDT on big exchanges) usually means tighter spreads and smoother fills.
Low liquidity can cause:
- Wider spreads
- Slippage on market orders
- Gaps when price jumps between levels
Major sessions (London, New York) typically bring higher forex liquidity than quiet Asian afternoon hours for some pairs — covered in Module 5.