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  • What is slippage

What is slippage

Slippage is the execution of an order in a price different than the one being set or expected by the trader. It happens very often in forex but also in stock and derivatives markets. For example if the trader has placed a stop loss order at 1.25490 in EUR/USD pair then it might be executed not exactly at this rate but lower or higher. Especially with stop market orders this is very common because when the price hits the stop it becomes market and is executed at the price that the market will be a little bit later, higher or lower.  

In forex markets one of the main reasons that cause slippage is high volatility and rapid moves especially when news are announced. Most of the time slippage will be against the trader.

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