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Liquidity Pool (in trading)

In trading analysis, a liquidity pool can describe an area where traders expect a concentration of executable orders, stops or other market activity to exist. This is different from a DeFi liquidity pool used by an automated market maker.

Why it matters to you

Obvious highs, lows and heavily watched levels can attract orders. When price reaches these areas, increased trading activity may occur as stops trigger, positions close and new orders enter.

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