There is a principle worth returning to: intention without the capacity to act is incomplete.
A trader sits with clear analysis. The pattern is visible. The probability is understood. The conviction is high.
The click to execute happens.
And the order doesn’t fill as expected. Or the price moves before action is possible. Or the market gaps past the stop. Or the exit that was planned simply isn’t there.
This is the gap between intention and action that liquidity fills, or fails to fill.
The Permission
When liquidity is present, thought becomes deed smoothly. Order to execution. Decision to outcome. The infrastructure is invisible because it works.
When liquidity disappears, that gap becomes an abyss. The trader has knowledge. They have intention. But they lack the permission to act on what they know.
Consider this word: permission.
Permission is usually thought of as something granted by authority. Someone allows action to happen.
But there’s another kind of permission, the permission that emerges from conditions. Not “may I?” but “can I?”
A musician with skill and inspiration still needs an instrument. A writer with ideas needs language and medium. A trader with edge needs liquidity.
This is infrastructure in its truest sense: the underlying structure that makes action possible.
Most of the time, infrastructure remains invisible. Electricity isn’t appreciated until the power goes out. Roads aren’t valued until mud is encountered.
And traders don’t think about liquidity until the moment they need to act and can’t.
The Story
March 2, 2020. Brad Finson, a retail trader, had positioned himself well for the COVID crash. Put options on Boeing. $113,000 in profit. All he needed to do was sell.
At 9:18 AM, he placed his order. His broker confirmed it.
At 9:33 AM, the platform went dark.
For seventeen hours, he watched the market’s then-largest single-day point rally while locked out. His order was eventually cancelled. His account dropped $52,000.
The market had liquidity. But Finson didn’t have access to it. His permission to act was revoked by infrastructure failure.
The entry worked. The exit didn’t exist.
The Deeper Recognition
Here’s what becomes clear upon reflection: liquidity isn’t really a market condition. It’s a collective psychological state.
Liquidity is the willingness of others to take the other side of a trade.
Consider what that means.
For a sell to happen, someone must buy. For an exit to occur, someone must enter. Action depends entirely on another consciousness being willing to act in opposition.
When confidence is high, that willingness is abundant. People buy the selling. Market makers provide quotes. The machine hums smoothly.
When fear is high, that willingness evaporates. Everyone wants the same thing, out, and no one wants in. The infrastructure that seemed mechanical reveals itself as coordinated human intention.
This is perhaps the most important insight: the capacity to act depends on others’ willingness to receive that action.
Traders are not independent actors. They are nodes in a network of willing participants.
The Pattern
Every crash follows the same sequence:
Phase 1: Confidence builds. Spreads tighten. Activity increases. Everything feels liquid. This feeling gets mistaken for permanence.
Phase 2: A crack appears. Something breaks. Early sellers exit easily. Most don’t notice.
Phase 3: The crack widens. More sellers emerge. Market makers retreat. The willing buyers thin out.
Phase 4: The rush. Everyone sells simultaneously. Buyers vanish. The willingness that created liquidity disappears.
Phase 5: The bottom. Liquidity is worst precisely when prices are best. Those with intention and capital still can’t act efficiently.
This pattern repeated in 2000, 2008, and 2020. Different costumes. Same behavior.
Because the pattern isn’t about markets. It’s about human consciousness under pressure. Greed compresses awareness during expansion. Fear triggers simultaneous contraction.
The Practice
Before any trade, a question worth asking:
Is there permission to act?
Not permission from authority. Permission from conditions.
Is the spread reasonable? Is the depth sufficient? Is execution accessible when needed? If fear strikes the collective, what happens to the exit?
These aren’t merely technical questions. They’re questions about the relationship between intention and the world’s capacity to receive it.
A setup with no exit is incomplete.
The Humility
Markets teach humility.
Not the humility of “not knowing enough”, that can be addressed with study.
The humility of “action depends on others.”
No amount of analysis changes this. No amount of skill bypasses it. Every trader needs someone to take the other side.
This is why position sizing matters. Why platform choice matters. Why timing matters. Why thinking about exits before entries matters.
Not because these are “trading rules.” Because they acknowledge the relational nature of action itself.
Closing
Liquidity isn’t just a market concept. It’s a truth about how action works.
Intention requires knowledge. Knowledge requires action. But action requires conditions, the willingness of the world to receive what the mind has prepared.
Those who ignore this will learn it through experience. Those who understand it can size for it. Those who accept it can move through markets with a different kind of clarity.
The market moves. Permission appears and disappears. The mind learns to see what was always there.
This is the truth as I have found it. Your path may reveal more.
— Ashim
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These lessons are part of my ongoing public research on
Risk1Reward3.
Liquidity — The Permission to Act
Why liquidity is a collective psychological state.
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