Is it possible to avoid slippage?
While you can’t completely eliminate slippage, you can take steps to help reduce its occurrence:
- Use limit orders:
Instead of market orders, use limit orders to set the specific price at which you want to buy or sell. Limit orders can help avoid unexpected price changes, but please note that there is no guarantee that your order will be executed at your desired price. - Trade during peak hours:
Trade when the market is most active, such as during major trading sessions, to benefit from higher liquidity. This can help reduce the impact of slippage, though it cannot guarantee that slippage will not occur. - Monitor market conditions:
Stay informed of upcoming economic events or news that could cause volatility. If you’re concerned about slippage, consider avoiding trading during times of high volatility or uncertainty.
Risk Warning: Slippage is a common occurrence in trading and can result in either better or worse execution prices than anticipated. There are no guarantees against slippage, and it should be factored into your overall risk management strategy.