"Insufficient liquidity. Try reducing collateral or leverage." error indicates that the platform does not have enough available liquidity to support the desired trade with the specified collateral and leverage. This often occurs during periods of high market activity or when liquidity in the pool is low.
You might see this error for several reasons:
- High Utilization Rate: The liquidity pool is highly utilized, meaning most of the available liquidity is already locked in other positions.
- Large Position Size: The requested position size may be too large relative to the available liquidity.
- Market Conditions: Extreme market conditions can lead to rapid changes in liquidity availability.
To resolve this error, you can:
- Reduce Collateral: Lower the amount of collateral you are using for the position. This reduces the overall size of your trade, making it easier for the platform to allocate the necessary liquidity.
- Reduce Leverage: Lower your leverage. This also decreases the total position size, which might fit within the available liquidity.