Slippage in crypto trading: how not to lose your deposit on volatility

When volatility is off the charts, an order may be executed at a price completely different from what you set. This is called slippage — and it can work both in your favor and against you.

Two Faces of Slippage

Positive slippage is a high: you wanted to buy BTC at $59 000, but the exchange hit you at $58 500. Profit already on entry.

Negative slippage is pain: planned a purchase, but instead of $59 000 it went for $59 500. Minus $500 on the spot position or more on futures.

How to protect yourself

On normal exchanges, there is a slippage tolerance feature — this is your stop signal for slippage. You set an acceptable percentage, and if the slippage is greater — the order will not go through.

Calculation formula:

• Do you want BTC at $59 000 with a limit of 0.5%
• $59 000 × 0.005 = $295
• So, the worst-case scenario is buying at $59 295

Calculate the real slippage percentage: (market price − execution price) ÷ market price × 100%

In moments of maximum volatility, increase the allowable slippage — otherwise the order will hang and you will miss the entry point. The balance between protection and execution — that's the whole focus.

TL;DR: Always set a slippage limit. Volatility is increasing — expand the allowance. You will die on a slip — you won't die at the entry price.