Most explanations on this topic about adding and removing liquidity simply state that market orders remove liquidity and limit orders add liquidity. Is it possible to have a bit more elaborate explanation as to why this is so?
Marketable orders REMOVE liquidity.
Non-Marketable orders ADD liquidity.
I guess before understanding the above, I need to understand what exactly is liquidity as applied to stock markets? Does it simply mean stocks which are trading frequently and there is a huge number of buyers and sellers?