Measuring liquidity with
LDPM
Real time liquidity
Measuring liquidity is usually either a time-intensive process or requires significant capital for the data, or both. Stuff that most people (like me) don’t have.
The reason for this is clear: measuring liquidity is a very potent and accurate way to measure the current and future price-action of an equity.
So, I did some math and created the Liquidity-Dependent Price Movement. It compares how much the price is moving with what it took to make those moves happen. From this, you can get a pretty good view of where the price is likely to go next.
If that sounds interesting, check out the LDPM Primer below.
Getting the Data
Access LDPM is done through TradingView – in order to use LDPM you must have a TradingView account.
Once you have LDPM, you can apply it to charts and start using it right away – it works with cryptocurrencies, equities, derivatives – you name it. If the asset has a price and volume, LDPM can give you insights into the asset’s liquidity.