#Liquidity101
💧 Why Liquidity Matters in Trading
#Liquidity101
When I started trading, I didn’t think much about liquidity. But it turns out, it's one of the most important things that affects how well your trade goes.
📖 What is Liquidity?
Liquidity = how easily you can buy or sell an asset without moving the price too much.
High liquidity = fast trades + fair pricing
Low liquidity = delays, slippage, or even failed orders 😬
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⚠️ How it affects your trade:
• You might pay more (or sell for less) than expected
• Big orders might move the market
• In volatile times, illiquid assets can be risky to exit
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🛠 How I check liquidity:
• Look at 24h volume on exchanges
• Check the order book depth
• On DEXs, check liquidity pools (like how much ETH/USDT is in the pool)
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🎯 How I reduce slippage:
• Use limit orders, not market orders
• Avoid trading large amounts in small-cap tokens
• Trade during high-volume hours
• On DEXs, adjust slippage tolerance carefully — don’t just leave it at 10%
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💬 Have you ever been caught in a low-liquidity trade? What do you do to avoid slippage?
