Introduction
When executing trades on the Heshket Spot market, prices can change between the moment you place an order and when it is filled. Slippage tolerance is a setting that lets you define the maximum acceptable price deviation you are willing to tolerate for a trade to execute. By specifying this parameter, you can protect yourself from unexpectedly large differences between the expected and actual execution price.
What Is Slippage?
In trading, slippage refers to the difference between the price at which you expect to execute a trade and the actual price at which the trade is filled. This difference can occur due to market conditions such as high volatility, low liquidity, or rapid price movements in the order book.
For example, if you place a market order to buy an asset at 100 USDT but the price has moved by the time the order executes, you may end up buying at 101 USDT. The 1 USDT difference represents slippage.
What Is Slippage Tolerance?
Slippage tolerance is a parameter that determines the maximum percentage of price deviation you are willing to accept when placing an order. If the price moves beyond your specified tolerance level between the time you submit the order and the time it is executed, the order will not be fully filled or may be canceled.
On Heshket Spot, setting a slippage tolerance helps ensure that your trade does not execute at a price that deviates excessively from the expected price.
How Slippage Tolerance Works
When you place a market order with a defined slippage tolerance:
- The exchange attempts to fill your order at the best available price within the tolerance range.
- If market conditions cause the price to move beyond your tolerance threshold, the order execution will stop or cancel the unfilled portion.
- This protects you from larger-than-expected negative price movements during order execution.
For example, if you set a slippage tolerance of 1% and the price moves more than 1% away from the expected price before the order is filled, Heshket will prevent the trade from executing at a worse rate.
Why Slippage Tolerance Is Important
Slippage tolerance plays an important role in protecting traders from:
- Unexpected price movements: Rapid market volatility can cause prices to change significantly in seconds.
- Low liquidity conditions: In markets with fewer buyers or sellers at a given price level, orders may fill at less favorable prices.
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Large orders: Bigger orders may move through the order book and get filled at multiple price levels, leading to slippage.
By setting slippage tolerance, traders limit how far the execution price can deviate from the intended price.
How to Set Slippage Tolerance on Heshket Spot
On the Heshket Website
- Log in to your Heshket account and go to the Spot Trading page.
- Choose Buy or Sell under the Market Order section.
- Select the Slippage Tolerance field.
- Enter your desired slippage tolerance percentage (for example, 0.5%, 1%, or another value based on market conditions).
- Review your order details and submit the order.
Once submitted, your order will attempt to execute within your specified tolerance range.
On the Heshket Mobile App
- Open the Heshket app and navigate to Trade → Spot.
- Select Buy or Sell in the market order interface.
- Tap Slippage Tolerance and enter your preferred tolerance percentage.
- Confirm and submit the order.
Your order will process while respecting the slippage limit you set.
Tips for Choosing Slippage Tolerance
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Low volatility, high-liquidity pairs: You can set a lower tolerance (for example, 0.1% to 0.5%) to ensure tight price control.
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High volatility or low-liquidity pairs: You may need a higher tolerance (for example, 1% or more) to allow the trade to fill without being rejected.
Choosing the right slippage tolerance depends on asset liquidity and current market dynamics.
What Happens If Slippage Is Too Low or Too High
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Too low: If your slippage tolerance is set too low, your order may not execute, especially during volatile market conditions or for large trades.
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Too high: A high tolerance allows execution even during wide price swings, but it increases the risk of executing at a less favorable price.
Finding a balance helps ensure order execution without exposing you to unnecessary price risk.
Need Assistance?
If you have questions about slippage tolerance or need help configuring it for your trades, visit the Heshket Help Center or contact Heshket Customer Support.