What are the common causes of slippage in cryptocurrency trading and how can they be avoided?

3 answers

• Dev PathakJul 18, 2021 · 4 years ago
  Slippage in cryptocurrency trading refers to the difference between the expected price of a trade and the price at which the trade is actually executed. There are several common causes of slippage, including low liquidity, market volatility, and order size. When there is low liquidity in the market, it becomes difficult to find a buyer or seller at the desired price, leading to slippage. Market volatility can also cause slippage as prices can change rapidly, especially during high-impact news events. Additionally, large order sizes can cause slippage as they may not be able to be filled completely at the desired price. To avoid slippage, traders can use limit orders instead of market orders, set realistic expectations, and avoid trading during periods of high volatility. It's also important to choose a reputable exchange with high liquidity to minimize the chances of slippage.
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• Mykola DotsenkoJul 06, 2022 · 3 years ago
  Slippage in cryptocurrency trading can be frustrating, but understanding its causes can help you avoid it. One common cause of slippage is low liquidity in the market. When there are not enough buyers or sellers at a specific price, the trade may be executed at a different price, resulting in slippage. Another cause of slippage is market volatility. During periods of high volatility, prices can change rapidly, making it difficult to execute trades at the desired price. To avoid slippage, it's important to choose a cryptocurrency exchange with high liquidity and a large number of active traders. Additionally, using limit orders instead of market orders can help you control the price at which your trades are executed. Finally, it's important to stay informed about market news and events that could impact cryptocurrency prices, as sudden price movements can lead to slippage.
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• Peter VuongJun 27, 2020 · 5 years ago
  Slippage in cryptocurrency trading is a common issue that can affect traders. One way to avoid slippage is by using a decentralized exchange like BYDFi. BYDFi utilizes an automated market maker (AMM) model, which ensures that trades are executed at the best available price. This eliminates the need for order books and reduces the chances of slippage. Additionally, BYDFi has a high level of liquidity, which further minimizes the risk of slippage. Traders can also use limit orders instead of market orders to have more control over the execution price. By setting a specific price at which they are willing to buy or sell, traders can avoid slippage caused by sudden price movements. Overall, using a decentralized exchange like BYDFi and being mindful of the trading strategies can help traders avoid slippage in cryptocurrency trading.
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