Strategies to reduce slippage
1. Order splitting
Break large orders into several smaller ones and execute them in stages.
Algorithms like TWAP (Time-Weighted Average Price) or VWAP (Volume-Weighted Average Price) are used.
2. Using limit orders
Instead of market orders, use limit orders to set entry/exit prices.
Risk: the order may not be executed if the price does not reach the limit.
3. Trading during high liquidity hours
4. Avoid entering/exiting near news
During periods of high volatility, liquidity can drop sharply, and slippage can increase.
5. Algorithmic Trading
Using trading bots that automatically optimize entry considering liquidity and volatility.
6. Accounting for exchange fees and "hidden" charges
Some exchanges charge different fees for makers (limit) and takers (market). This affects order choice.
Tools for evaluation
TradingView — order book, volumes, liquidity indicators.
Bookmap — visualization of market depth and liquidity.
CoinMarketCap / CoinGecko (for crypto) — liquidity metrics by exchanges and tokens.
Interactive Brokers, Binance, Bybit, etc. — provide data on spreads, depth, and slippage.
It is important to consider:
In low liquidity assets, even small orders can cause significant price movement.
Liquidity can quickly disappear — especially in stressful market conditions.
Trading on DEXs (decentralized exchanges) adds nuances: here liquidity depends on pools.
