Liquidity Happens: Day Trading Lessons Applicable to Life.

In the midst of a chat conversation with the trading group the other day, the topic of entries and exits came up. Nothing different than you might expect, except for the vernacular that was being used: Liquidity Happens: Day Trading Lessons Applicable to Life.

Liquidity Happens

One of the best pieces of advice that I have heard recently is:

price loves company

At first that sounds a little odd, but then to see it in action, the simplicity is quite remarkable. Pick your favorite chart and time frame.

You will see liquidity happening right in front of you everywhere. Yes, we are giving a noun action properties.

Wouldn't you agree that creating liquidity there are all sorts of actions involved? Buying, selling, trading, HODL'ing, just to name a few.

But seriously check out your favorite chart and draw some lines across where you see all the activity and things begin to look different. Here, let me give you an example.

Some very successful traders use this strategy to help set their support and resistance levels.

Price Loves Familiarity

It's kind of shocking how common it is but if you look across most assets there are common areas of business or in this case liquidity.

Now what about that other perspective

In Crypto and In Life

So the lessons we learn in day trading any asset are as interesting and fascinating as they could be anywhere else, but add crypto into the mix and all of a sudden the complexity is exponentially increased.

Let's look at the familiar price again and apply it to everyday living. Think about something in your life that captures an amazing amount of your focus and attention.

Is it your family? Maybe it's a hobby you constantly have on your mind. Possibly even that cup of coffee you have every morning.

Now go and try to adjust the schedule, frequency or occurrence and let's see what happens. You will find there is a natural tendency for those occurrences to repeat themselves.

Find the same conversation happening again and again with your family?

The Thermostat Principle

I have heard this example used numerous times and I am finding the price action in crypto no different. Think about your setting in your home on the thermostat. Let's start with a balmy 68 F.

So what happens, when you have had the house at 68 degrees for sometime? Let's say it's a sunny day. The light radiates the home and there's a small up tick in temperature.

As the direct sun light wanes, so the temperature begins to rest back at the stasis level of 68 F. It works the other way too. When there's an over cast day with a chill in the air, the furnace can kick on, but for the most part there is a constant that returns to normal.

This example plays out over and over in all aspects of life. Think of the last time that you exercised. Your body temperature increased then decreased. Or maybe you jumped in a pool and it decreased only to be followed by a rise.

The point is that we all have a natural equilibrium that can shift over time, but there is a seemingly invisible foundation that is set under certain conditions.

Sounds alot like crypto no? Can we say support and resistance?

What to do next?

So what happens the next time you see a huge pump or a massive volume dump? You think to yourself,

Hey, liquidity happens!!!

Just remember to find those lines of commonality. Those areas of confluence. The times when prices, volumes and all sorts of things in life as well begin to reset or return to a known or familiar condition.

It will help with staying calm, reduce stress, and give some clarity for decisions as you act out of abundance not lack. You will recognize your personal power increase when you are not applying it to those other areas in your life with less return.

Now get out there and put this to work.

Be Blessed!