Normal Forex & Crypto Trading · Chapter 9
Liquidity & Order Execution
Where your orders meet the market: liquidity, market structure (FX vs Crypto), order types, time‑in‑force, slippage, and fees — so you execute with confidence.
What you’ll be able to do after this lesson
- Explain liquidity in plain terms and recognize how it shows up as bid–ask spread, market depth/DOM, and volume.
- Describe market structure: why forex is OTC (no single exchange) and how crypto trades via order books (CEX) and AMMs (DEX).
- Choose the right order type (market, limit, stop, stop‑limit, trailing stop) and the right time‑in‑force (DAY, GTC, IOC, FOK).
- Quantify slippage and apply tactics to minimize execution cost.
- Differentiate maker vs taker fees and understand how adding vs taking liquidity affects total cost.
- Read a basic DOM / order book and relate depth to likely slippage.
Introduction: Understanding execution
Think of liquidity as your “exit door” — kapag masikip ang pintuan, mas malaki ang slippage. This chapter makes execution clear and actionable so you understand why fills change, how costs stack up, and how to avoid expensive mistakes.
Prerequisites
Complete Chapters 1–8 first (candles/volume/indicators basics, stop loss & take profit, leverage basics, exchanges 101 including fees & wallets) before starting Chapter 9.
Estimated time breakdown
- Lesson content: 90–120 minutes
- Workbook exercises: 45–60 minutes
- Quiz: ~15 minutes (12 questions)
Lesson roadmap
Section 1 — Liquidity in the Real World
- Bid‑ask spread as a liquidity thermometer
- Depth/DOM shows absorption capacity
- Why liquidity changes by session, time, and pair/coin
Section 2 — Market Structure: FX vs Crypto
- FX is OTC — liquidity peaks during session overlaps
- Crypto: order books (CEX) vs AMM pools (DEX)
- What market structure changes about execution
Section 3 — Order Types
- Market vs Limit: when to use each
- Stops, stop‑limits, trailing stops for risk control
- How order choice affects slippage
Section 4 — Time‑in‑Force
- Control how long orders stay alive
- When IOC/FOK helps (and when it hurts)
- Execution control vs missed entries
Section 5 — Slippage & Total Cost
- Slippage worsens with speed + size + shallow depth
- Cost stack = spread + slippage + fees
- Tactics to reduce slippage
Section 6 — Maker vs Taker Fees
- Maker = adds liquidity (often cheaper)
- Taker = removes liquidity (often more expensive)
- How fees change your real R:R
Section 7 — Reading the DOM / Order Book
- Spot thin pockets where price can jump
- Relate depth to likely slippage
- Basic order‑book “walls” and what they mean
Workbook
- Execution + cost drills and checklist
- Apply learning to real scenarios