How do I handle slippage while placing orders on Kraken ?

[Annelise]

I'm new to the cryptocurrency market and I'm looking for some advice on how to handle slippage while placing orders on Kraken. I'm aware that slippage is the difference between the expected price of a trade and the price at which the trade is actually executed. I'm wondering how I can minimize the risk of slippage when placing orders on Kraken. What strategies can I use to ensure that my orders are executed at the best possible prices? Are there any specific techniques or tools I should be aware of? Can anyone provide any tips or advice for navigating the Kraken exchange and minimizing the risk of slippage? Any help would be greatly appreciated. Thank you.

 

[Burger-Swap]

What Is Slippage?

Slippage is the difference between the expected price of a trade and the price at which the trade is actually executed. It is a common occurrence in the stock, futures, and cryptocurrency markets, and can have a significant impact on trading performance.

What Causes Slippage?

Slippage is caused by a variety of factors, including market volatility, order size, liquidity, and the type of order placed. Market volatility can cause prices to move quickly, making it difficult for orders to be filled at the expected price. Order size can also cause slippage, as larger orders require more liquidity to be filled, and liquidity can be limited in certain markets. Finally, the type of order placed can also cause slippage. For example, market orders are filled at the current market price, whereas limit orders are filled at a specified price or better.

How to Handle Slippage on Kraken?

Kraken is a popular cryptocurrency exchange that offers traders a range of tools to help them manage slippage.

One of the most effective ways to handle slippage on Kraken is to use limit orders. Limit orders allow traders to specify the exact price at which they want their order to be filled. This helps to ensure that orders are filled at the expected price, reducing the risk of slippage.

In addition to limit orders, Kraken also offers a variety of other tools that can help traders manage slippage. For example, traders can use the “Post-Only” feature, which ensures that orders are only placed if they can be filled at the expected price. They can also use the “Hidden” order type, which allows them to place orders without revealing the price to other traders. Finally, Kraken also offers a “Stop Loss” feature, which allows traders to automatically close their positions if they reach a certain price.

Conclusion

Slippage is a common occurrence in the stock, futures, and cryptocurrency markets, and can have a significant impact on trading performance. To help manage slippage, traders can use limit orders on Kraken, as well as a variety of other tools such as the “Post-Only”, “Hidden”, and “Stop Loss” features. By using these tools, traders can reduce the risk of slippage and improve their trading performance.