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With your trust and support, WazirX is opening doors to a stronger and brighter chapter for all of us.
In the initial days, you may observe price differences across platforms, trades executing at slightly different levels, or short-term volatility. These are expected behaviors of a market regaining balance after a prolonged pause.
Understanding concepts like arbitrage, slippage, and price volatility can help you stay prepared and avoid outcomes arising from rushed decisions. All you need to do is try to stay calm and trade smart, and you’ll be able to navigate the restart smoothly, and markets will stabilize just in time.
Here’s a quick breakdown of these concepts to help you understand their importance for Day One of the Restart.
#1 Arbitrage
Arbitrage refers to the price gap that happens when the price of the same token is slightly different across two platforms.
For example, a token might display slightly different prices across exchanges, particularly when a platform has just restarted after a long pause and trading activity is still stabilizing. Such price gaps can also arise due to regional variations, sudden news events, or imbalances in buying and selling. These situations are common in developing markets and typically resolve over time as prices adjust and normalize.
Why it matters during restart: Some users may trade quickly in the early phase, leading to temporary price gaps. While some traders may view this as an opportunity, it’s important not to rush or panic if you notice these differences. As trading volumes rise and more liquidity flows in, these gaps will reduce and prices will align with global markets. We encourage users to stay calm, think carefully, and act wisely during the initial days of the restart. Arbitrage opportunities typically disappear quickly as prices normalize and should be approached with awareness of associated risks.
#2 Slippage
Slippage happens when your trade is executed at a slightly different price than the one you expected. This usually occurs when there aren’t enough buy or sell orders available at the exact price you chose, or when market prices are moving quickly.
Large trades are more likely to experience slippage because they require more orders to be filled at the desired price. Slippage is a normal aspect of trading, especially in markets with lower activity, and understanding it can help you plan your trades more carefully.
Why it matters during restart: On Day One, with liquidity still forming, large market orders can lead to execution at lower-than-expected prices. A steadier approach is to use limit orders or smaller trades, which give users more control and smoother execution. Breaking trades into parts may help ensure smoother execution and minimize unwanted price differences. This way, you may also minimize risk and allow liquidity to improve gradually.
#3 Price Volatility
Price volatility refers to the natural fluctuations in the price of a token over a short period. Prices can fluctuate rapidly due to factors such as high trading activity, sudden news, or shifts in supply and demand. Volatility is more noticeable in markets with lower liquidity or when a large number of users are trading at the same time.
Why it matters during restart: Price volatility is expected when the platform restarts after a pause. Panic-selling or quick buying can amplify these swings. The key is to stay calm, avoid panic-selling, and make informed decisions, giving the market a chance to stabilize. As trading activity increases, volatility will ease and prices will stabilize. Patience will help users trade more effectively.
A Smart Approach for Day One
- Start small: Consider trading in smaller amounts until markets stabilize.
- Be patient: Early fluctuations are normal and temporary.
- Avoid emotional decisions: Take time to evaluate and make trades carefully.
- Stay informed: Keep an eye on official updates for information.
Key Takeaways
The restart is a new chapter for all of us. It’s not just about resuming operations, it’s about growing stronger, together. Arbitrage, slippage, and price volatility are natural in the initial days, but they are temporary, and will diminish as liquidity strengthens and trading volumes increase. What matters most is how calmly and wisely we navigate this together.
We deeply value the trust and patience you have shown throughout this journey. By acting wisely, trading patiently, and giving the market a few days to stabilize, you can make the most of this new beginning.
Let’s begin this new phase with confidence, gratitude, and a commitment to trade wiser and smarter.
Disclaimer: Click Here to read the Disclaimer.
