What are some common causes of market slippage in the cryptocurrency industry?

1 answers

• Dec 17, 2021 · 3 years ago
  Market slippage in the cryptocurrency industry can be caused by various factors. One of the main reasons is the lack of standardized trading rules and practices across different exchanges. Each exchange may have its own order matching algorithm and liquidity pool, which can result in price discrepancies and slippage when executing trades. Another factor is the presence of high-frequency traders and market makers, who can exploit small price differences between exchanges to profit from arbitrage opportunities. This can lead to rapid price movements and slippage for individual traders. Additionally, the use of leverage and margin trading can also contribute to slippage, as traders may be forced to close their positions at unfavorable prices to meet margin requirements. Overall, market slippage in the cryptocurrency industry is a complex issue influenced by various factors, and traders should carefully consider these factors and implement risk management strategies to minimize its impact.
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