#Liquidity101

Liquidity plays a vital role in crypto trading—it determines how quickly and easily you can buy or sell an asset without causing major price changes. High liquidity means tighter spreads, faster execution, and minimal slippage. Low liquidity, on the other hand, can lead to large price swings and poor trade execution.

Before entering a position, I evaluate liquidity by checking 24-hour trading volume, order book depth, and bid-ask spread. Coins listed on major exchanges usually offer better liquidity.

To reduce slippage, I use limit orders instead of market orders, especially for large trades. Splitting trades into smaller chunks and trading during peak volume hours also helps.

💡 Tip: Always assess liquidity before trading to avoid unnecessary losses.

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