Hey everyone! 
I’ve recently started trading on a new exchange and yesterday, I tried to sell a few of my crypto assets. To my surprise, the price dropped significantly as I placed my order, and I ended up with way less than I expected. 
I’ve been reading about liquidity, but I’m still confused. Could anyone explain how liquidity affects my trading experience? Is this why my order didn’t execute as planned? I want to avoid this in the future. Any insights would be super helpful! Thanks! 
That sounds frustrating! Basically, liquidity refers to how easily an asset can be bought or sold without significantly impacting its price. If an exchange has low liquidity, a large sell order can cause the price to drop, just like what happened to you.
Sorry to hear about your experience. 
Liquidity is key in trading; higher liquidity means that there are lots of buyers and sellers at different price points. When you place a large order in a low liquidity market, it can move the market price down, resulting in a lower sale price.
Liquid markets have plenty of buyers and sellers, so when you hit ‘sell’, there’s a good chance it will execute at the price you expect. If liquidity is low, your order can “eat through” available buy orders, pushing the price down.
That sounds like a tough lesson learned! 
Liquidity directly affects how your orders execute – in a liquid market, prices tend to stay stable, while in illiquid markets, your action can shift the price significantly. Always check the liquidity before placing bigger trades.
Just to clarify, liquidity is about how quickly and easily you can sell your assets without affecting the price too much. Your order may not have executed at the expected price due to low interest from buyers at that moment. Being mindful of liquidity can definitely help in the future.
It seems like you experienced slippage due to low liquidity. When you placed your sell order, the price dropped because there weren’t enough buyers at your desired price level, so it went to the next available lower price.
Generally, in a highly liquid market, larger orders won’t affect the price much. However, in a less liquid market, a larger sell order can create downward pressure. It’s always good to check the order book for liquidity before placing big orders.