The difference between buying momentum and buying liquidity relates to how market activity and trading volume are evaluated:
1. Buying Momentum:
• It refers to the strength of the movement in the buying direction, and expresses the speed and strength of price increases as a result of increased demand for assets.
• It can be measured by monitoring price movements over time, and if prices are rising continuously and strongly, this reflects strong buying momentum.
• Momentum depends on the pace and continuity of buying, not just on the volume of money in circulation.
2. Buying Liquidity:
• It refers to the amount of money available in the market for buying, and the ease of buying or selling assets without significantly affecting prices.
• A market with high buying liquidity means that there are a large number of buyers (and sellers) willing to enter into deals easily and at prices close to the current price.
• Liquidity measures trading volume and the ability to enter and exit the market quickly without significantly affecting price movements.
In short:
• Buying momentum reflects the strength and continuity of price increases due to buying.
• Buying liquidity reflects the amount of money available and the ease of trading.