Managing Slippage in Your Trading: A Complete Guide to Slippage Tolerance

When you place a market order, you expect to buy or sell at the current market price. But in reality, the price you actually fill at might be significantly different—sometimes much higher for buys or much lower for sells. This price deviation is called slippage, and it’s one of the biggest challenges traders face, especially in low-liquidity markets. That’s where slippage tolerance comes in. This feature lets you set guardrails around your trades, ensuring your market orders execute only within your acceptable price range across Spot, Spot Margin, and Futures trading.

Why Slippage Matters: Understanding Price Deviation in Market Orders

Before diving into slippage tolerance, it’s important to understand what causes slippage in the first place. When you send a market order, you’re agreeing to buy or sell at the best available price in the market at that moment. But between the time you submit your order and when it actually executes, prices can move—sometimes dramatically. In low-liquidity trading pairs or during high volatility, this gap widens significantly.

Slippage becomes especially problematic in Futures trading where liquidity can be sparse. Without any protection, you might execute a buy order expecting to pay $2,100 but end up paying $2,115. Or sell expecting $2,000 but receive only $1,985. Over dozens of trades, these small differences compound into meaningful losses.

Key Advantages of Using Slippage Tolerance

Setting slippage tolerance offers several critical benefits for your trading strategy:

Protection Against Extreme Price Movements — Rather than accepting whatever price the market gives you, slippage tolerance acts like a safety valve. Your order simply won’t fill if prices move beyond your comfort zone. This shields you from the wild price swings that can occur during volatile market conditions.

Smoother Execution in Thin Markets — Futures contracts often suffer from limited depth and wide bid-ask spreads. Slippage tolerance optimizes your order execution by functioning similarly to a limit order based on the Ask1 (for buys) and Bid1 (for sells) prices, but with the speed and responsiveness of market orders. You get the best of both worlds.

Predictable and Reliable Trading — By defining your acceptable price range upfront, you transform unpredictable market orders into controlled trades. You know exactly what price conditions will trigger execution and which will result in partial fills or cancellations.

Faster Alternative to Limit Taker Orders — Instead of waiting for the market to move to your limit price, slippage tolerance allows faster execution while still maintaining your price standards.

Configuring Your Slippage Parameters: Amount vs. Percentage

Slippage tolerance can be set in two ways depending on your preference and the trading pair you’re using.

Setting by Amount (Fixed Deviation)

When you set slippage by amount, you specify a fixed deviation in the settlement currency from the Ask1 price (for buy orders) or Bid1 price (for sell orders).

For Buy Orders: Limit Price = Ask1 + {amount}

For Sell Orders: Limit Price = Bid1 − {amount}

Here’s a concrete example: Suppose you’re trading ETH/USDT. The Ask1 is 2,100 USDT and Bid1 is 2,000 USDT. You set a slippage tolerance of 0.1 USDT.

• Your buy order’s limit price becomes 2,100.1 USDT (2,100 + 0.1)
• Your sell order’s limit price becomes 1,999.9 USDT (2,000 − 0.1)

In this scenario, your buy order executes only if the market price stays at 2,100.1 USDT or lower, and your sell order executes only if the market price stays at 1,999.9 USDT or higher. Any portion of your order that would execute outside these boundaries gets canceled.

Important Note: When setting slippage by amount, the value is always denominated in the settlement currency (USDT in the example above). Additionally, for BTC and ETH, slippage can only be set by amount—percentage setting is not available for these pairs.

Setting by Percentage (Proportional Deviation)

Percentage-based slippage tolerance adjusts based on the reference price, giving you proportional protection across different price levels.

For Buy Orders: Limit Price = Ask1 × (1 + {percentage}%)

For Sell Orders: Limit Price = Bid1 × (1 − {percentage}%)

Using the same ETH/USDT example, but now setting slippage tolerance at 0.5%:

• Your buy order’s limit price becomes 2,110.5 USDT [2,100 × (1 + 0.5%)]
• Your sell order’s limit price becomes 1,990 USDT [2,000 × (1 − 0.5%)]

With percentage-based slippage tolerance, your buy order fills if the market price is 2,110.5 USDT or lower, while your sell order fills if the market price is 1,990 USDT or higher. Again, any execution outside this range triggers a cancellation of the unfilled portion.

Percentage-based slippage tolerance is particularly useful when trading pairs with fluctuating prices, as your tolerance automatically adjusts proportionally.

Step-by-Step: Placing Orders with Slippage Tolerance Enabled

Step 1: Open Your Trading Interface

Navigate to the trading page and select your desired trading pair. On the right panel, choose your trading direction and select Market order type. Enter your desired order value or quantity just as you normally would.

Step 2: Enable and Configure Slippage Tolerance

Check the Slippage Tolerance checkbox. A dropdown menu will appear allowing you to toggle between By Amount and By Percentage. Enter your preferred tolerance level based on which method you selected. The interface will immediately show you the market depth and provide a preview of whether your order is expected to fill completely.

This preview is crucial—it gives you visibility into whether sufficient liquidity exists at your specified tolerance level to execute your full order size.

Step 3: Review and Confirm

Click Buy or Sell to bring up the confirmation popup. Review all details including your order size, your slippage tolerance setting, and the expected execution range. Once satisfied, click Buy or Sell again to execute. Your market order with slippage tolerance is now live.

Monitoring and Reviewing Your Slippage-Protected Orders

After placing orders, you’ll want to track them and verify your slippage tolerance settings were applied correctly.

On the Trading Page: Go to the Order History section at the bottom of the screen. Hover over any order to see its associated slippage tolerance value.

From the Navigation Bar: Click Orders at the top right of the navigation bar to access your full order history. Hover over any order to view its slippage tolerance details.

This way, you can audit your trading activity and confirm that slippage tolerance protection was active for your trades.

Important Limitations and Special Cases to Know

Default Behavior: Slippage tolerance is disabled by default. Once you enable it and set your preferred configuration, the system remembers your settings and applies them automatically the next time you access the trading page.

Execution Not Guaranteed: The actual fill depends on your order size and available market depth. Even with slippage tolerance enabled, if insufficient liquidity exists at your tolerance level, only the portion of your order that can execute within your tolerance range will fill. The remainder gets canceled rather than overfilling at worse prices.

Unsupported Order Types: Slippage tolerance currently cannot be applied to OCO orders, Conditional orders, or Trailing Stop orders. If you need protection with these advanced order types, you’ll need to rely on other risk management strategies.

Futures Market Close: For Futures trading specifically, you can also enable slippage tolerance when using the Market Close function. Set your slippage percentage or amount the same way you would when placing a regular order.

By understanding and properly configuring slippage tolerance, you transform market orders from unpredictable gambles into controlled trades that execute within your defined price parameters.