#Liquidity101

💧 Liquidity: the fuel of efficient trading..

Have you ever entered a trade and exited with a price very different from what you expected?

That, my dear, is the effect of low liquidity. And it can cost you dearly!

🔍 What is liquidity?

It is the ease with which you can buy or sell an asset without impacting the market price. The higher the liquidity, the more fluid the execution. The lower, the greater the chance of slippage (that unpleasant price deviation).

💥 In times of high volatility, liquidity is tested — and those who don’t prepare feel it in their pockets.

📊 What do I observe before entering a position?

· Average volume in the last 24h

· Depth of the order book

· Presence in exchanges with higher liquidity

· Type of pair (exotic assets suffer more)

🛡️ Tips to avoid slippage:

✅ Use limit orders (don’t go for the impulse of a market order!)

✅ Keep an eye on peak volume times

✅ Avoid trading during economic announcements or unpredictable events