What Is Slippage in Crypto?
Key Takeaways
• Slippage is the difference between the expected price and the actual execution price of a trade, influenced by market conditions.
• Factors contributing to slippage include low liquidity, market volatility, large order sizes, and network congestion.
• Traders can set slippage tolerance levels to manage their risk, balancing the likelihood of trade execution against potential price impacts.
• Strategies to minimize slippage include trading on high-liquidity markets, avoiding high volatility periods, using limit orders, and breaking large orders into smaller chunks.
• Security measures, such as using hardware wallets, can help protect against slippage-related risks during trades.
