Liquidity
The term liquidity refers to the ease with which an asset can be bought or sold without altering its price. A market or asset is considered liquid if it has a high degree of liquidity, meaning it can be purchased or disposed of promptly and smoothly at a stable price.
In the context of the Smart Money Concept, liquidity holds a crucial significance as market makers aim to acquire as much liquidity as they can prior to driving the market in a specific direction.
Liquidity can also be utilized as a strategy for setting Stop Loss and Take Profit. In the foreign exchange market, liquidity can manifest in three major forms:
1. Equivalent Highs/Lows
2. Demand-side/Supply-side Liquidity
3. Trendline Liquidity
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