#Liquidity101

Important Secrets Behind the World of Trading that Are Rarely Discussed. What is Liquidity in Trading? In simple terms, liquidity is how easily an asset can be bought or sold without significantly disrupting market prices. High Liquidity = Plenty Why is Liquidity Important? Faster and Easier Transactions You can buy or sell at any time without having to wait a long time for matching. More Stable Prices Assets with high liquidity tend not to What Happens If Liquidity is Low? Prices can change drastically just because of a small order Large traders can "fry" prices Difficult to get out of position (stuck) Transaction fees become more expensive. Smart Tips to Avoid Liquidity Problems Always check the trading volume and order book before purchasing tokens, especially in new projects. Use limit orders, not market orders, in markets with liquidity Conclusion: Liquidity is the Breath of the Market Without liquidity, markets can die. Prices don't move. Transaction stopped. And your money could be trapped. On the other hand, a liquid market is a healthy market: dynamic, fair and efficient. Therefore, before you buy an asset with FOMO just because of the "hype", check first: how is the liquidity?