Cryptocurrency Q&A
Why is my price impact too high on PancakeSwap V2?
Why is my price impact too high on PancakeSwap V2?
Leonardo
Wed Sep 18 2024
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7 answers
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I'm curious, could you explain why I'm experiencing a high price impact when trading on PancakeSwap V2? Is it due to the liquidity pool being insufficient for the size of my trade? Or could it be related to the current market conditions and volatility? As a cryptocurrency investor, I'm eager to understand the factors that contribute to this phenomenon and how I can potentially minimize my price impact in future trades. Any insights you can provide would be greatly appreciated.
7 answers
Silvia
Fri Sep 20 2024
Cryptocurrency trading involves various settings that traders must navigate to optimize their trades. Among these settings is the concept of "slippage," also known as price impact.
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amelia_miller_designer
Fri Sep 20 2024
Slippage refers to the difference between the expected execution price of a trade and the actual price at which the trade is filled. This can occur due to rapid market movements or low liquidity.
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BonsaiGrace
Fri Sep 20 2024
One common issue traders encounter is "Pancakeswap price impact too high." This indicates that the expected price of a trade on the Pancakeswap decentralized exchange deviates significantly from the actual market price.
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henry_grayson_lawyer
Fri Sep 20 2024
To address this issue, traders can adjust the slippage tolerance setting. The default slippage tolerance is typically set around 2%, which may not be sufficient for trades on smaller markets or during periods of high volatility.
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lucas_taylor_teacher
Thu Sep 19 2024
By increasing the slippage tolerance, traders allow for a wider range of prices to be considered for trade execution. This can help ensure that trades are filled, even if the market price moves significantly.
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