๐ What is Slippage? And why is it dangerous for traders?
When executing a trade, you expect it to happen at the displayed price... but sometimes it gets executed at a different price! ๐
This difference is known as slippage.
๐ What causes slippage?
โก Rapid market movements
๐ง Low liquidity in the trading pair
๐ข Delay in order execution
๐ Example:
You want to buy a currency at $1.00, but the trade executes at $1.03... which means you lost 3% immediately ๐ฌ
๐จ Why is it dangerous?
โ It reduces your profits
โ It amplifies your losses
โ It confuses your strategy
๐ก๏ธ How to avoid it?
โ Use Limit orders instead of Market orders
โ Choose pairs with high liquidity
โ Avoid times of high volatility
๐ Learn every day, and reduce your losses with information before making a decision โ๏ธ