What is liquidity in trading according to Kyle Ng (JadeCap)?

Every visible swing high on a chart has buy stops resting above it. Every swing low has sell stops resting below it. Those clusters of resting orders are pools of liquidity, and professional traders know where every one of them sits.

Large players need that liquidity because they need counter flow to enter positions. For every buyer there is a seller. A fund that wants to buy in size gets its fill where other people are forced to sell: right below a swing low, where longs are being stopped out and breakout shorts are jumping in.

That is why the market so often trades to an obvious level, takes it out by a few ticks, and reverses. It is not out to get you personally. Your stop is just parked in the same pool as everyone else's, and that pool is the fuel for the next real move.

Sources: The Only Liquidity Video You'll Ever Need · Secret to Liquidity Sweeps