FSP Academy
Glossary

Liquidity

How easily an instrument can be traded without moving its price.

Liquid markets have tight spreads and deep order books, so you get filled near the quoted price; thin markets punish you with slippage and gaps. Liquidity also varies by session, which is why the same strategy can behave very differently at 3am versus the open.

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Market Structure course →
How price, liquidity, and order flow actually move.
Related terms

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