#Liquidity101

Liquidity is one of the most important factors you need to understand before entering any trade in the crypto market.

When the market has high liquidity, you can execute your orders quickly and with less price slippage.

However, if liquidity is low, the trade may be executed at a different price than you intended, and this is called slippage.

How to assess liquidity:

Check the daily trading volume of the pair you intend to trade.

Monitor the order book depth, and if you find large gaps between the buy and sell prices, this is an indicator of weak liquidity.

Strategies to reduce slippage:

Use limit orders instead of market orders.

Avoid trading during major news events.

Choose pairs that have high volume like BTCUSDT.