Why do your trades execute at worse prices than expected? 📉
💧 Liquidity shows how easily you can buy or sell a coin without noticeably affecting its price.
⚡ Slippage is the difference between your expected price and the actual execution price.
📉 Low-liquidity coins usually have higher slippage, especially when using market orders.
🔄 In pair trading, you have two legs: execution errors can happen twice on entry and twice on exit.
For example: you expected to buy A at 100, but executed at 100.3. You expected to short B at 50, but executed at 49.9. Both inaccuracies went against you.
Typical mistake: choosing a low-liquidity coin for an interesting spread without assessing the entry and exit prices.
How do you check a coin's liquidity before entering a trade?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
💧 Liquidity shows how easily you can buy or sell a coin without noticeably affecting its price.
⚡ Slippage is the difference between your expected price and the actual execution price.
📉 Low-liquidity coins usually have higher slippage, especially when using market orders.
🔄 In pair trading, you have two legs: execution errors can happen twice on entry and twice on exit.
For example: you expected to buy A at 100, but executed at 100.3. You expected to short B at 50, but executed at 49.9. Both inaccuracies went against you.
Typical mistake: choosing a low-liquidity coin for an interesting spread without assessing the entry and exit prices.
How do you check a coin's liquidity before entering a trade?
#Futures #CryptoTrading #CryptoEducation #RiskManagement