Market liquidity is how much can be bought or sold near the current price without moving it. When it thins, the same order walks the price away from you while it fills, and that gap is a cost. What it does not do is change the cycle. This article covers why thin liquidity makes moves sharper both ways, why the directional read holds, and what does change: order placement and how much a brief move proves. On May 6, 2010 the Dow fell 998.5 points and gave most of it back within
