A question about trading liquidity
A question about trading liquidity
About Liquidity what I understood that is if a trader buys a coin worth $100 and later sells his coin at $90 due to bad market conditions. Here liquidity is $10.
- Now my question is because of liquidity does that project or coin get profited?
- Or does the profit accrue to those who later make a profit in trading?
That’s a loss but if you want to make that a description of liquidity, well then – you’ve been liquidated.
Both of the guys are correct about what liquidity means. For other terms, it’s also about the volume so buying and selling won’t be a problem for a trader.
And that’s a factor to be chosen when you’re investing on the market and as well as when you’re trading.
Hmm, Nope it’s not liquidity that decides the profit or loss but the trader itself, it’s the trader who decides his trade in profit or loss, Liquidity is not the reason for the change in market price, it’s the trades getting executed.
Liquidity is ese with which we can buy or sell coins/tokens, Higher liquidity = lower price changes in the market, and lower liquidity = higher changes in the market price. For the rest in order to go deep into this concept I would like to hear more from your side, to know what is your perspective about the liquidity and price fluctuation in the market. But yup liquidity itself cant generate profit for traders or projects.