What is "Slippage" in trading?
Have you ever placed a trade, only for it to fill at a slightly different price than you expected? 🤔 That difference is often due to something called "slippage."
Slippage happens when the price of a crypto asset changes between the time you submit your order and the time it actually gets executed.
This usually occurs in fast-moving markets or when you're trying to trade a large amount of a coin that doesn't have much liquidity.
Imagine you want to buy a coin at $10, but by the time your order goes through, the best available price is $10.05. That $0.05 difference per coin is your slippage. 💸
You often see slippage on decentralized exchanges (DEXs) or during periods of high volatility.
Most trading platforms let you set a "slippage tolerance." This is the maximum percentage you're willing to accept as a price difference.
If the market moves beyond your set tolerance, your trade might not go through.
Setting a small tolerance can protect you, but it might mean your order doesn't execute at all if the market moves too fast. ⚙️
#SlippageExplained #CryptoSecurity #TradingTips #BinanceSquare #learncrypto
- Disclaimer: Sharing knowledge and insights as part of learning and growing together. For educational purposes only, not financial advice.
