What Are Some Strategies Traders Use to Minimize Slippage When Executing Large Orders?

Traders use several strategies to minimize slippage. One common method is to break a large order into smaller pieces and execute them over time, reducing the immediate price impact.

Another strategy is using 'limit orders' instead of 'market orders', which specify a maximum or minimum price for the trade, preventing execution at unfavorable prices. More advanced strategies include using algorithms like TWAP (Time-Weighted Average Price) or VWAP (Volume-Weighted Average Price), which automate the process of breaking up orders to execute them as close to the average price as possible over a set period.