💧 WHAT IS LIQUIDITY?
Liquidity simply means how easily an asset can be bought or sold without causing a big price change.
In Futures, liquidity is important because it helps you understand where traders are likely placing their orders and where price may move to find them.
📌 Simple example:
Imagine BTC/USDT is trading at $100,000.
Many traders have:
🔴 Stop-losses above $101,000
🟢 Stop-losses below $99,000
These areas contain orders/liquidity.
Price may move toward these areas before making its next major move.
💡 Think of liquidity as a pool of orders waiting to be triggered.
🎯 KEY IDEA:
Don't ask only:
❌ “Where is price going?”
Also ask:
✅ “Where are the orders/liquidity?”
Liquidity simply means how easily an asset can be bought or sold without causing a big price change.
In Futures, liquidity is important because it helps you understand where traders are likely placing their orders and where price may move to find them.
📌 Simple example:
Imagine BTC/USDT is trading at $100,000.
Many traders have:
🔴 Stop-losses above $101,000
🟢 Stop-losses below $99,000
These areas contain orders/liquidity.
Price may move toward these areas before making its next major move.
💡 Think of liquidity as a pool of orders waiting to be triggered.
🎯 KEY IDEA:
Don't ask only:
❌ “Where is price going?”
Also ask:
✅ “Where are the orders/liquidity?”
