💧 Understanding Liquidity in Crypto Trading #Liquidity101
Liquidity is a key factor in crypto trading that directly affects how fast and efficiently your trades are executed. High liquidity means tighter spreads, faster order matching, and less slippage. Before entering a position, I always assess liquidity by checking trading volume, order book depth, and the asset's historical price stability.
In low-liquidity situations, I apply strategies like using limit orders to avoid unexpected execution prices and splitting larger orders into smaller ones. Whether you're trading BTC, altcoins, or DeFi tokens, understanding liquidity helps protect your capital and optimize your entries and exits.
What’s your go-to strategy to reduce slippage? 🔄
