A liquid market is a market where there are a large number of buyers and sellers who are willing to trade at any time. In a liquid market, there is a high volume of transactions, and it is easy to buy or sell an asset without significantly affecting the price. This is because there are many participants in the market, and the assets being traded are readily available.
A liquid market is typically associated with high trading volumes and low bid-ask spreads, which means that the difference between the price a buyer is willing to pay and the price a seller is willing to accept is small. Examples of liquid markets include major currency pairs, large-cap stocks, and government bonds. On the other hand, a market with low trading volumes and wide bid-ask spreads is considered to be an illiquid market.