Part 5/8:
An essential part of being a successful liquidity provider is actively monitoring your position. Each liquidity strategy can entail different risks and potential for rewards, especially in volatile markets.
Volatility Expectations: Understanding expected price movements is paramount. For highly volatile events like token drops, a bid-ask strategy can help capture significant price action while managing your exit with tight sell/buy brackets.
Fee Generation: Monitor the fees being generated in real-time. Depending on the direction of the market, you may adjust your strategies or decide to withdraw liquidity at opportune times to minimize losses or maximize gains.