Market liquidity is a key evaluation indicator for measuring the health and activity of global capital markets, covering stocks, bonds, foreign exchange, futures, and commodity trading markets in Europe, America, and other overseas regions. High market liquidity means that there are sufficient active buyers and sellers in the market at all times, and investors can complete asset trading transactions in a short time with minimal transaction costs and no obvious deviation between the transaction price and the market fair price. In contrast, low market liquidity, also known as illiquidity, will lead to trading delays, increased bid-ask spreads, and drastic asset price volatility, which is one of the core risks that institutional investors such as overseas hedge funds, asset management companies, and securities institutions must assess before trading. In international financial market operation, major regulatory institutions such as the Federal Reserve and the European Central Bank often adjust monetary policies according to market liquidity status: injecting capital into the market to relieve liquidity crunches during economic downturns, and tightening liquidity to suppress market speculation and asset bubbles during economic overheating. For individual overseas traders and financial practitioners, judging market liquidity is crucial for formulating short-term trading strategies and long-term asset allocation plans. High-liquidity assets such as US dollar mainstream currency pairs and large-cap US stocks are suitable for short-term frequent trading, while low-liquidity small-cap stocks and long-term corporate bonds are more suitable for long-term holding investment, which can effectively avoid liquidity risk losses.