Liquidity describes how much size a market can absorb, on either side, before price moves meaningfully in response. A liquid market has a deep order book: large buy and sell orders resting close to the current price, so a typical trade barely nudges the price at all. A thin, illiquid market has little resting size nearby, so even a modest order can walk noticeably up or down the book before it's fully filled.
Liquidity is the direct driver of slippage: the same order size produces far more slippage in a thin market than a deep one, which is exactly why a strategy's real-world costs depend on which coins it trades, not just how good its signal is.
It's also why zengtrade's coin universe is filtered to Binance USDT-spot pairs specifically: a coin with a real regime read and a real backtest still needs a real, tradable market underneath it for that evidence to mean anything live, not just a market-cap ranking on a data provider.
Educational content, not investment advice. zengtrade is paper-first and non-custodial.