Slippage is the difference between the price requested for an order and the price at which it is executed. It can be positive or negative and is most likely when prices move quickly or available liquidity is limited.
Why slippage occurs
A market order requests execution at the best available price. The displayed price may change between the time the order is sent and the time it reaches the market. If the requested price is no longer available, the order may execute at the next available price.
Slippage is more likely:
- during major economic announcements;
- at market open or after a weekend;
- when trading a less liquid instrument;
- during rapid price movement;
- when spreads widen; or
- when a larger order must use more than one available price level.
Positive and negative slippage
- Positive slippage: the order executes at a more favourable price than requested.
- Negative slippage: the order executes at a less favourable price than requested.
- No slippage: the requested price remains available and the order executes at that price.
How to reduce exposure
- Check the economic calendar and market opening times.
- Consider liquidity and spread conditions before submitting an order.
- Use an order type that matches your objective and understand that pending and stop orders can also experience gaps.
- Use an appropriate trade size and risk limit.
Slippage cannot be predicted or eliminated completely. If you want an execution reviewed, send Support the account number, ticket, symbol, requested price, executed price, platform time and relevant Journal entry. Never send your password.