💧 𝗪𝗵𝗮𝘁 𝗜𝘀 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆?
Liquidity means the amount of buying and selling activity available in a market.
In simple words: Liquidity is where orders are sitting.
For example, if many traders place their Stop Loss above a previous high, that area contains liquidity. Price can move toward that area, trigger those orders, and then continue in another direction.
📌 𝗛𝗶𝗴𝗵 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 = Many Orders
📌 𝗟𝗼𝘄 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 = Fewer Orders
Traders often watch previous highs, previous lows, equal highs, and equal lows because these areas can hold a lot of liquidity.
Understanding liquidity can help you better understand why price moves to certain levels before making the next move. 📊
Liquidity means the amount of buying and selling activity available in a market.
In simple words: Liquidity is where orders are sitting.
For example, if many traders place their Stop Loss above a previous high, that area contains liquidity. Price can move toward that area, trigger those orders, and then continue in another direction.
📌 𝗛𝗶𝗴𝗵 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 = Many Orders
📌 𝗟𝗼𝘄 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 = Fewer Orders
Traders often watch previous highs, previous lows, equal highs, and equal lows because these areas can hold a lot of liquidity.
Understanding liquidity can help you better understand why price moves to certain levels before making the next move. 📊
