Slippage

What is Slippage?

Slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed. This concept is very common in the fields of cryptocurrency and trading on various exchanges.

How Does Slippage Occur?

Slippage happens because of the volatility in the market. Price changes can occur between the moment a trading order is placed and the moment it is executed. This is more common in fast-moving markets and can affect both market orders and limit orders.

Types of Slippage

Slippage can be positive or negative. Negative slippage occurs when a trade is executed at a worse price than expected, resulting in a higher purchase price or lower selling price. Conversely, positive slippage happens when a trade is executed at a better price than expected, providing a financial benefit to the trader.

Slippage in Crypto Trading

In the context of cryptocurrency trading on an all-in-one platform, managing slippage is crucial. Crypto markets are notably volatile, making slippage a frequent issue. Traders can manage risk associated with slippage by setting stop-loss orders or opting for limit orders over market orders, which provide more control over the prices at which trades are executed.

Minimizing Slippage

To minimize slippage, traders often use advanced trading strategies and tools. For example, choosing times when the market is less volatile can reduce the likelihood of significant price changes. Additionally, some all-in-one trading platforms offer features designed to protect against excessive slippage, enhancing the trading experience.