Minimizing Slippage: Tactics for Futures Trade Execution.
Minimizing Slippage: Tactics for Futures Trade Execution
Futures trading, particularly in the volatile world of cryptocurrency, offers significant opportunities for profit. However, a critical factor often overlooked by beginners – and even experienced traders – is slippage. Slippage represents the difference between the expected price of a trade and the price at which it is actually executed. Minimizing slippage is paramount to maximizing profitability and managing risk. This article will delve into the causes of slippage, its impact on futures trades, and a range of tactics to mitigate its effects, geared towards those new to the intricacies of crypto futures.
Understanding Slippage
Slippage occurs due to the dynamic nature of markets. When you place an order, especially a large one, it takes time for that order to reach the exchange and be filled. During this time, the market price can move. If the price moves unfavorably, you experience slippage.
There are two primary types of slippage:
- Positive Slippage:* This occurs when your order is filled at a *better* price tha
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