Slippage in Crypto markets. Table of Contents
How does Slippage affects cryptocurrency trading?
The cryptocurrency market is a highly volatile market. Even bitcoin, which is the largest in the market today, fluctuates very dramatically in just a few hours. On December 18, 2018, at 14:00 UTC, Bitcoin rose to $3,573, then fell to $3,546 at 23:00 UTC, and then rose to $3,560 on the 19th at 02:14 UTC.
Due to this volatility, investors are saddled, that is, the current market price order is not executed at the price at the time the order is placed, but at a lower price. These problems can lead to significant losses for cryptocurrency investors.
Slippage occurs a lot in Crypto markets
Slippage is a phenomenon that occurs when there is a difference between the price at which the trader enters the market and the price actually traded. This phenomenon occurs in all markets including cryptocurrency markets, foreign exchange transactions, and stocks. “High volatility” means that market liquidity is low, while prices (prices) fluctuate very quickly. If positive or no slippage occurs, it is not a problem, but negative slippage can pose a very serious risk.
The cryptocurrency market is in its infancy, only a few years ago. This situation occurs because the current cryptocurrency market does not support liquidity to process large orders, and instead of executing the entire transaction at one price, it is distributed over several small orders, and the price of each small order fluctuates.
Technical problems are also one of the reasons for slippage. The second-best platform system acts as a serious problem for the exchange’s operation, and deposits and withdrawals are also one of the causes of slippage. In highly volatile markets such as cryptocurrencies, transactions must always be made at a fast pace to mitigate the risk of price fluctuations. Web page loading speed and fast server response are essential for users.
How can IronX protect traders from slippage?
IronX Exchange is servicing by solving problems with other exchanges, including slippage causing financial damage.
A thin order window means low trading volume, which hinders the influx of new traders. Due to the small volume of trading, market liquidity also declines, causing price discrepancies and slippage between exchanges. The IronX Ecosystem is an interconnected platform that is linked to high-volume exchanges. Through this system, the trading volume will increase significantly, and through collaboration with various exchanges, it will provide deep and large trading volume.
As the ease of trading increases, more and more traders will participate in this Ecosystem and create market liquidity. This allows traders to be safe from the threat of Slippage.
Cryptocurrency market’s volatility is extremely high
It is very important to avoid or predict factors that may affect your trading strategy. There are external factors such as market volatility, economic news, and political events. It is very important to observe these factors carefully at all times when placing or placing a trading order, and slippage is one of them.
The volatility of the cryptocurrency market is very high, and asset value fluctuations change in the blink of an eye. Every situation can change from moment to moment until the order reaches the exchange, and it is called slippage when the price is concluded lower than the price expected by investors.
Slippage can be positive or negative, and there can be no slippage at all. This can be caused by the difference between the time when the order is entered and the time entered at the exchange, and occurs when the buy and sell spreads change.
How to avoid order delays and reduce slippage
Transaction requests must be sent and executed at a high rate to protect the trader’s assets from the risk of price movement. Depending on the specific exchange, transaction execution and transfer speeds can take from 30 minutes to several days.
Choosing an exchange that supports fiat and crypto deposits is the best way to avoid transmission delays. Exchanges must be regulated by international law and the appropriate institutions. You should take a closer look at the white paper to see what technology platforms a particular exchange uses. This is also a great help in making sure that the exchange platform is suitable for your trader trading strategy. You also need to make sure that you can guarantee the trader’s order execution and that it has liquidity. If liquidity is insufficient, a trader’s order can take days or weeks.
Who are IronX and IronFX?
As the sub-platform system is highly likely to cause delays in the execution of transactions and general transactions, there is a high possibility of slippage when trading cryptocurrency, and it negatively affects traders’ transactions.
The IronX Exchange Platform is based on AlphaPoint technology to efficiently execute trading orders and prevent slippage from negatively affecting profits. IronX Exchange provides an innovative solution to the overall problem of current cryptocurrencies. It is implemented with an intuitive and easy-to-use interface and supports secure Fiat-crypto currency transactions.