A Guide to Stop Slippage in Crypto

[Jasz]

In the volatile world of cryptocurrencies, slippage is a common phenomenon. It refers to the difference between the price you expect to pay for an asset, and the actual price you pay in the final transaction. Slippage often occurs when trading in environments with low liquidity, or when the market experiences sudden changes in value.

But this doesn’t mean that you should avoid trading assets with high volatility — quite the opposite. The trick is to know your tools so you can execute trades at exactly the right moment.

Here’s how to stop slippage:


1. Use limit orders
A limit order — also known as a “take profit order” — lets you set your own buying and selling prices. This means you can execute a trade at exactly the right moment instead of having to settle for a market price that may not be ideal.

2. Set stop-loss orders
Stop-loss orders let you execute trades automatically when your assets reach a certain price — whether it’s higher or lower than what they are currently trading for. This lets you ensure that your profits are locked in at a good rate and your losses won’t go beyond what you expect them to be.

 

[Suba]

I hear the word Slippage a lot and it can happen to all markets be it stock market, bonds, forex, equities and crypto markets. Slippage trading is a condition when there is a difference between the expected price of the trade and the price at which the trade was executed. Slippage occurs due to high levels of market volatility and/or low liquidity in the period between confirmation and execution of the trade. Slippage on crypto due to low liquidity. Requests in large quantities are usually more prone to slippage.

Apart from using "Use limit orders and Set stop-loss orders" we can also use other methods such as:

Using the Active Crypto Exchange
An active crypto exchange will be able to process transactions quickly so that it will be able to avoid transaction failures and slippage.

Avoid Volatile Markets
Do not make transactions when the market is volatile, because it is very vulnerable that prices will change quickly.

Take advantage of the Pending Orders feature
Using the pending orders feature is one of the most effective ways to reduce crypto slippage. Traders can use this feature to set their own prices.

Creating Tolerant Slippage
Some brokers such as: PancakeSwap, Uniswap, and Bakeryswap offer slippage tolerance which allows the ask price to be executed with the desired input slippage tolerance. If the trader sets a maximum deviation of 3%, the price will still be executed as long as the slippage is less than or equal to 3% but if it is more than 3% then the ask price will not be executed.