The invention discloses a liquid bandage and a preparation method. The liquid bandage comprises the following raw materials: polyvinyl acetal, dibutyl phthalate, methyl cellulose, glycerol, laurocapram, chitosan, 95% ethanol, securidaca inappendiculata, dragon blood, frankincense, myrrh and sanchi; the preparation method comprises the following steps: stirring and dissolving the polyvinyl acetal,the chitosan and the ethanol at a temperature of 5 DEG C, and adding the laurocapram, the glycerol, the dibutyl phthalate and the methyl cellulose to obtain film liquid; performing reflux extraction on the crushed securidaca inappendiculata, dragon blood, frankincense, myrrh and sanchi with ethanol at a temperature of 60 DEG C until the extracted liquid is colorless, filtering at a normal pressure and concentrating; and adding the concentrated solution of the securidaca inappendiculata, the dragon blood, the frankincense, the myrrh and the sanchi into the film liquid and mixing uniformly. Theliquid bandage is convenient to use and has high water resistance and air permeability, without sticking on clothes and cotton-padded mattress, causing anaphylaxis and drug resistance or being limited by the shape, size and location of the wound.