#Liquidity101
๐ง Market Liquidity โ Why is it important?
Before entering any trade, you must ask yourself:
Is this asset easy to buy and sell? ๐ค
๐น Liquidity = The ease of converting an asset to cash quickly and without significantly changing its price.
๐ High liquidity?
โ Fast execution of trades
โ Low spread (the difference between buying and selling price)
โ Example: BTC or ETH on major platforms
๐ Low liquidity?
โ ๏ธ Difficulty in executing orders
โ ๏ธ You might sell at a loss due to a lack of buyers
โ ๏ธ Example: Small or new cryptocurrencies
๐ก Advice for beginners:
Choose assets with strong market liquidity, so you can enter and exit easily and without unexpected losses
