Understanding Slippage in Crypto Trading

Slippage is the difference between the expected price of a trade and the price at which the trade is executed. It often occurs during periods of high volatility or low liquidity. Why does slippage happen? When you place a trade, especially a large one, the order may not be filled at the expected price due to market movement or insufficient liquidity. How to minimize slippage - Trade during periods of high liquidity - Use limit orders instead of market orders - Monitor market volatility Slippage in DeFi In decentralized exchanges, slippage is common due to the automated nature of AMMs. Many platforms allow you to set a maximum slippage tolerance to protect your trades.