#Liquidity101
Liquidity101: An Essential Factor in Crypto Trading
Liquidity plays a key role in determining how quickly and efficiently orders are executed in the market. The higher the liquidity, the lower the risk of slippage and wide spreads.
Why Liquidity Matters:
Liquid markets = faster order execution and more stable prices
Illiquid markets = wider spreads, slower execution, higher slippage risk
My Personal Strategy:
1. Check the order book for market depth and spreads
2. Use smaller timeframes (5M/15M) to monitor liquidity zones
3. Avoid entering trades during low volume or sideways market conditions
How do you manage liquidity risk in your trades? Feel free to share your approach in the discussion.