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Can you explain the concept of slippage in trading?

» General Trading
  • Slippage occurs when there's a difference between the expected price of a trade and the actual price at which the trade is executed.
  • This can happen due to market volatility when an order is placed during a period of rapid price movement.
  • Slippage can affect any trade order type, but it's more common with market orders and during periods of high market impact news events.

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Can you explain the concept of slippage in trading?

Sure thing, could someone break down what slippage in trading means? Just got into doing some trading on my own, and I've seen this term pop up a few times. It's kinda confusing. Is it all about the difference in price from what I expect to pay or sell at and what actually goes down in the transaction? How does it really affect trades, and what should I be watching out for to avoid any nasty surprises? Would appreciate any insights or tips from you all who've been in the game longer. Thanks!

Absolutely, you've nailed it. Slippage happens because of the time delay between placing your order and when it gets executed. Prices can change during this window, especially in fast-moving markets. To minimize slippage, consider using limit orders instead of market orders. This way, you're setting the maximum or minimum price you're willing to deal with.

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