What is liquidity in trading, and why do smart money traders pay so much attention to it?
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Liquidity in trading is simply the area of the market where a large number of orders are sitting—mainly stop-losses, pending buy/sell orders, and limit orders. It’s where big players can enter or exit positions without causing extreme price movement. Think of it like “fuel” in the market: price moves because liquidity is available for it to trade into.
Liquidity in trading is simply the area of the market where a large number of orders are sitting—mainly stop-losses, pending buy/sell orders, and limit orders. It’s where big players can enter or exit positions without causing extreme price movement. Think of it like “fuel” in the market: price moves because liquidity is available for it to trade into.
