One sentence: Spread is the "visible tax", slippage is the "hidden knife", newbies who don't understand it will eventually get cut to tears.

First, the Bid-Ask Spread (Spread) — the Order Book's "Overt Robbery"

The spread is the difference between the highest bid (Bid) and the lowest ask (Ask).

 

For example:

  • Someone places a bid of 9.99 USD for BTC

  • Someone places an ask of 10.01 USD for BTC

    The 0.02 USD difference in between is the spread.

How does the spread come about?

  • Major coins (BTC, ETH): Deep liquidity, spread usually 0.01%-0.05%, almost imperceptible
  • Altcoins / meme coins: Poor liquidity, spread easily 0.5%-5%, buy and sell directly lose a few points
  • Market makers eat the spread in between: They place bids and asks, when others use market orders, they get sheared directly

How to calculate the spread percentage?

(Ask - Bid) ÷ Ask × 100

Example:

  • BTC spread 1 USD → percentage ≈0.001% (almost negligible)
  • Shitty meme coin spread 0.5 USD, coin price only 5 USD → percentage 10% (buy and sell directly lose 10%)
Summary: Smaller spread means better liquidity; larger spread means no one is playing this coin, higher risk.

Next, Slippage — the "Hidden Arrow" During Execution

Slippage is when you want to buy for 100 USD, but the actual execution price is 102 USD, the 2 USD in between "slips" away by the market.

 

How is slippage produced?

You place a market order, the system starts eating from the best price in the order book:
  • The first level of the order book only has 10 BTC (enough for 1/10 of your order)
  • After eating the first level, it automatically eats the second, third levels... prices get more expensive
  • Finally, your average execution price is several dollars higher than expected, that's negative slippage

Scenes most prone to slippage (Bloody History)

  • Small coins / junk coins: Order book only a few million USD, a 1 million USD market order can pull the price up 20%
  • Moments of surge or crash: Order book instantly cleared, slippage easily 10%-50%
  • DEX (like Uniswap): Shallow liquidity pools, one big order directly skews the price
  • Late night low liquidity periods: Order book thin as paper, one order directly penetrates

Positive slippage? Exists, but don't count on it

Occasionally the price slips in your favor (price suddenly drops when buying), but the probability is low enough to ignore, basically treat it as non-existent.

 

How to prevent slippage? Four Life-Saving Moves

  1. Always prioritize limit orders

    Market order = handing pricing power to the market, limit order = this is my price, take it or leave it

  2. Split big orders into batches

    A 10 million USD order split into 100 batches of 100k USD, eat slowly, don't dump all at once

  3. Set slippage tolerance on DEX

    Uniswap/PancakeSwap default 0.5%-1%, for big orders set to 3%-5%, too low won't execute, too high gets front-run (MEV bots watching you)

  4. Only play coins and pools with good depth

    BTC, ETH, SOL major pairs → slippage almost 0

    Newly listed meme coins → slippage can wake you from millionaire dreams to zero

Last Sentence to All Brothers Just Entering the Field

Small trades, treat spread and slippage as air;

Big trades, spread and slippage can directly decide if you're eating meat or being eaten.

In crypto,

Fees you can see,

Spread and slippage you can see but easy to forget,

Real big losses often die on these two "invisible killers".

Want to live long?

Before every order, first look at order book depth,

Then ask yourself:

How much slippage can this order eat?

If you can afford it, go; if not, withdraw.

Simple and crude, but can save you 99% of IQ tax.