GLOSSARY · MARKET STRUCTURE
What is Liquidity?
Liquidity is resting orders in the market — and the clusters of stop-loss orders around obvious levels.
In the broad sense, liquidity is how easily you can trade without moving price. ES and NQ are among the most liquid markets in the world.
In price-action trading, "liquidity" also means pools of stop orders above highs and below lows. Large players often push price into those pools to fill their orders.
EXAMPLE
Many traders place stops just below yesterday's low. That level holds a pool of sell-stop liquidity.
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