Recently, I saw someone lose money because of slippage again, and it reminded me to really talk through this issue properly.

To be honest, if you trade often, slippage is basically unavoidable. In simple terms, slippage is the difference between the price you expect to get and the price you actually end up getting. It sounds straightforward, but it really can bite you.

Let me give an example. Say you want to spend $1,000 to buy 5 XYZ tokens, thinking that each one will cost $200. Then the moment you hit “Market Buy,” the price jumps instantly, and you end up buying only 4.5 tokens, while your average cost rises to $220. That’s slippage in action.

Why does this happen? Mainly for two reasons. One is that the market moves too fast—especially with certain popular coins. But more often, the real cause is insufficient liquidity: the trading pair doesn’t have enough depth, so once a large order comes in, it’s easy for the price to be pushed up. I previously saw a case where a whale wanted to buy $8.65 million worth of WIF, but because of slippage, most of the buy orders were filled at ridiculously high prices, and they ended up losing quite badly.

So how should you respond? My advice comes in two parts. First, use limit orders instead of market orders, so you can lock in the price you’re willing to accept. Second, always pay attention to trading fees, because slippage plus fees can quickly wipe out most of your profit. Especially for trading pairs with low volume or poor liquidity, you need to be even more careful.

The advantage of trading on a major exchange like Gate is that liquidity is relatively sufficient, so slippage risk is smaller. But no matter what, thinking one step ahead before you trade and choosing the right order type can still save you a lot of money.