@snomleon
It is often said in the market that strategy is the most important thing. But in reality, many factors are decisive. Sometimes even a perfect forecast turns into a loss due to technical delays, lack of liquidity, or miscalculations in order mechanics.
▪️ Execution risk is the probability that a trade will not be executed as originally planned — at a different price, with a delay, or not at all.
In crypto, this risk is particularly noticeable due to high volatility and unstable liquidity. An order may not be executed at the desired price due to slow exchange response or network overload.
This risk covers several aspects:
🟢 Execution delays — when an order enters the market late.
🟢 Slippage — an order is executed at a less favorable price due to a lack of liquidity or rapid price movements.
🟢 Technical failures — problems on the part of the exchange, network, or the trader themselves (e.g., API freeze).
🟢 Unpredictable algorithm behavior — when algorithmic trading or a strategy does not adapt to changing conditions.
In professional trading, this risk is mitigated through limit orders, high-speed connections, redundant servers, and liquidity analysis before entering a trade.
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Execution risk — not a trader's mistake, but a property of the real market: there is always a gap between an idea and its implementation. And the higher the volatility, the more dangerous this gap becomes.