Slippage refers to the difference between the expected execution price and the actual execution price of a trade. It occurs when a trader executes a trade at a price that is different from the price they expected or intended to trade at. Slippage can occur in both directions, resulting in either a worse or better execution price than expected.

Types of slippage:

1. *Positive slippage*: The actual execution price is better than the expected price (e.g., buying at a lower price or selling at a higher price).

2. *Negative slippage*: The actual execution price is worse than the expected price (e.g., buying at a higher price or selling at a lower price).

Causes of slippage:

1. *Market volatility*: Rapid price movements can result in slippage.

2. *Liquidity issues*: Inadequate liquidity can lead to slippage.

3. *Order size*: Large orders can cause slippage.

4. *Execution speed*: Slow execution can result in slippage.

5. *Market impact*: Large orders can move the market, causing slippage.

To minimize slippage, traders use various strategies, such as:

1. *Limit orders*: Setting a specific price for execution.

2. *Stop-loss orders*: Automatically executing a trade when a certain price is reached.

3. *Algorithmic trading*: Using automated strategies to optimize execution.

4. *Liquidity provision*: Working with market makers and liquidity providers.

5. *Order fragmentation*: Breaking large orders into smaller pieces.