Kevin P Anderson

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What is slippage tolerance in trading platforms?

Slippage tolerance is a setting that allows traders to define the maximum price deviation they are willing to accept when executing an order. For example, setting a tolerance of 0.5% means the trade will execute as long as the price difference is within that range. This is common in crypto DEXs like Uniswap but also applies to forex brokers. It helps manage execution risk during volatile markets but can also cause orders to fail if tolerance is too strict. Professional traders balance tolerance settings to avoid overpaying while ensuring trades are executed reliably.