All terms
Definition
Liquidity
Liquidity is where many buy and sell orders are waiting. Large traders often target these areas before making the next move.
Quick take
Areas where many buy and sell orders are resting.
Keep this in mind every time you see liquidity on the chart — context is everything.
Did You Know?
Large institutions need liquidity to fill their orders, so price often visits old highs or lows to 'grab' stops before reversing.
Common Beginner Mistake
Placing stop losses right above obvious highs or below obvious lows — those are exactly the spots big players hunt.