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Liquidity Is Your Emergency Exit. Know Where It Is.

It’s Not Just About Entry — It’s About Exit

Most traders obsess over when to buy. But seasoned investors focus just as much on how to sell - and that’s where liquidity comes in. Liquidity means how quickly and efficiently you can buy or sell an asset without affecting its price. In illiquid markets, your exit could be slow, costly, or even impossible.

Risks of low liquidity include:

  • High slippage
  • Execution delays
  • Exposure to price manipulation

How to Assess Liquidity Before You Trade
Ask these questions before jumping into a trade:

  • What does the order book look like?
  • How large is daily trading volume?
  • Is the asset supported across major exchanges?
  • Are spreads wide or tight?

For advanced traders: consider using limit orders and setting up alerts for volume drops.
Liquidity is your insurance against getting stuck. Make sure your strategy includes not just how to enter, but how to get out - fast and smart.

Click the "Download" Button to read more in our E-Book series "Stepping into Digital Asset Trading".

The descriptions provided above are based on publicly available information, and cannot be considered as financial advice or encouragement to invest. All transactions involving digital assets involve certain risks, which you should familiarize yourself with prior to any investment.

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