Slippage trading is when a transaction is executed at a price that is different from the price requested by the trader. This happens when there is insufficient market liquidity to fulfill all buyer or seller requests at a particular price level. As a result, the order is executed at a price that is worse than what the trader wanted.
Slippage trading can occur in all types of financial markets, including cryptocurrencies, forex, and stocks. Slippage trading can be a problem for traders because it can ruin a trading strategy, even if the trader has done careful analysis beforehand.
Therefore, traders should always be aware of the risk of slippage and try to manage it by setting stop losses and avoiding trading during times of high market volatility. High market volatility is when there are sudden price changes in the time between confirmation and trade execution.
Also, slippage in crypto usually occurs due to liquidity or when there are not enough cryptos available at the quoted price to meet demand. Usually, large amounts of demand will be more prone to slippage due to liquidity issues.