Why Liquidity Is Not the Same as Volume

Volume and liquidity are related, but they aren't interchangeable.

Volume measures how much trading occurred during a period or at a price.

Liquidity describes how easily trades can be executed without causing a substantial price change.

A market can record high volume while experiencing rapid price movements and poor execution conditions.

Likewise, a market may have substantial displayed liquidity at certain prices but relatively little executed volume.

When trading NQ, I want to distinguish between how much has traded and how much liquidity is available around the current price.

This distinction helps explain why a market can feel easy to trade during one period and difficult during another.

High volume alone does not guarantee low slippage or stable prices.