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Key Takeaways
- Definition: Slippage is the difference between your expected price and the actual fill price.
- Can Be Positive: You can get a better price than expected (price improvement).
- Causes: Low liquidity, high volatility, slow execution, large order sizes.
- Most Common: During news events, market opens, and on less liquid pairs.
- Reduction Tips: Trade liquid pairs, avoid news, use limit orders, choose fast brokers.
Table of Contents
What is Slippage?
Slippage occurs when the price at which your order is executed differs from the price you expected. This happens because the market moved during the time between placing your order and when it gets filled.
Example: You click to buy EUR/USD at 1.1000. By the time your order reaches the server and gets executed, the price is 1.1002. You experience 2 pips of negative slippage.
Types of Slippage
| Type | Description | Impact |
|---|---|---|
| Negative Slippage | Filled at worse price than requested | Adds to costs |
| Positive Slippage | Filled at better price than requested (price improvement) | Reduces costs |
| No Slippage | Filled exactly at requested price | Neutral |
Good ECN brokers experience both positive and negative slippage depending on market conditions—it should balance out over time.
What Causes Slippage?
- Low Liquidity: Fewer buyers/sellers means orders take longer to fill.
- High Volatility: Fast price movement during news or market events.
- Large Orders: Big positions may need to fill at multiple price levels.
- Slow Execution: Broker latency, internet delays, or slow servers.
- Market Gaps: Price jumps past your level during weekend gaps.
How to Reduce Slippage
- Trade Major Pairs: EUR/USD, GBP/USD have deepest liquidity.
- Avoid News: Stay flat 15 minutes before/after high-impact news.
- Use Limit Orders: Limit orders only fill at your price or better.
- Choose Fast Brokers: ECN brokers with low latency reduce slippage.
- Trade During London/NY: Highest liquidity periods have less slippage.
- Use VPS: Reduces order transmission time significantly.
Best Low Slippage Brokers
| Broker | Avg Execution | Server Location | Price Improvement |
|---|---|---|---|
| IC Markets | ~40ms | NY4, LD5, TY3 | Yes |
| Pepperstone | ~30ms | LD4 Equinix | Yes |
| Exness | ~25ms | Multiple DCs | Yes |
| FP Markets | ~40ms | NY4 Equinix | Yes |
Frequently Asked Questions
What is slippage in forex?
The difference between your expected price and actual fill price. Standard in fast-moving markets.
Is slippage always bad?
No. Positive slippage gives you a better price. With good ECN brokers, slippage can work in your favor.
How do I avoid slippage?
Trade liquid pairs during active sessions, avoid news, use limit orders, and choose fast-execution brokers.
Why do I get more slippage during news?
Extreme volatility and widening spreads during news cause prices to move rapidly between order and fill.
Does slippage affect stop-loss?
Yes. Stop-loss orders become market orders when triggered, so they can slip especially during gaps.
What is price improvement?
When you get a better fill price than requested—positive slippage. Good ECN brokers pass this to clients.
Do limit orders prevent slippage?
Yes for entry. Limit orders only fill at your price or better. But they may not fill at all if price doesn't reach your level.
Which broker has least slippage?
ECN brokers like IC Markets and Pepperstone report lowest slippage due to deep liquidity and fast servers.
Does order size affect slippage?
Yes. Large orders may need to fill at multiple price levels (partial fills), increasing total slippage.
Is slippage the broker's fault?
Usually not. Slippage is a natural market phenomenon. However, some less reputable brokers may slip orders deliberately.
What is maximum deviation in MT4?
A setting that allows you to specify acceptable slippage. If price moves beyond this, order is rejected instead of slipping.
Does VPS reduce slippage?
Yes. VPS near broker servers reduces latency, meaning your orders arrive faster and have less time to slip.
