facebook banner
logotype
Back to list

How to Fight Slippage

6:46 PM Feb 26, 2020
11197
Forex trading

Slippage happened to all of us. No matter whether you trade currencies or stocks, commodities or crypto, slippage exists in these markets. Slippage is a common situation in crypto, as it is one of the most volatile markets, but it's also typical in Forex. That's why you have to know how to deal with slippage.

So how can I fight slippage in Forex? The answer is simple - there is no way. You can’t completely get rid of slippage. However, you can learn to coexist with it. Let's take a look at what slippage is, where it comes from, and how to reduce the chance of its appearing.

What is Slippage?

If you happen to make a request at one price and notice that the order opened with a different quote, then you have already experienced our problem. This difference in a couple of points is slippage.

The most interesting thing is that slippage is not always a bad thing. Sometimes a trade is opened with a difference of a couple of points in your favor and it brings you additional profit. But often you lose these very few pips.

However, do not confuse slippage with requote:

  • A requote appears when your order was not executed at the price you need and there this price is no longer available in the market. In this case, you are offered a new quote for your trade.
  • With slippage, your request is automatically executed at the price that is a few pips different from the one you’ve set.

Where Slippage Comes From

Slippage occurs due to the specifics of market execution. When you make a request, your order gets in a queue. By the time your turn comes, the available volume may simply not be enough for you.

Let's look at an example:

  • 0.9875 - 15 lots available
  • 0.9874 - 40 lots available
  • 0.9873 - 100 lots available
  • 0.9872 - 75 lots available
  • 0.9871 - 50 lots available

Let's say you want to enter the market at 0.9871. There are 50 lots available with this price on the market. Unfortunately, the whole volume was bought by traders who managed to make an order before you. In this case, your order is executed at the next available price of 0.9872. It may happen that these 75 lots also end before your order is executed. Then your order may shift further by a couple of points.

A limited amount of available trading volume is associated with liquidity. If the top liquidity layer is not enough to execute your order the request is sent to the liquidity provider. If your order is too large then it can be divided into several parts and sent to several suppliers at once. There are several options in this case:

  1. Your request will be executed at an average price from several liquidity providers.
  2. If one bank refuses to fulfill the request and sends it to the next one it causes a delay in execution. Because of this delay, there might not be your price in the market available anymore.

Slippage happens not only during regular order execution but also when your pending orders and Stop Loss and Take Profit levels are triggered.

How to Reduce the Chance of Slippage

There is a solution for each individual situation. It depends on the cause of the slippage. If you find out why a slippage occurs in your case then you can reduce the chances of its occurring.

Technical Issues

The market moves at a tremendous speed. Delays in signal in just a couple of seconds might cause the price you need to be simply unavailable anymore. Often such delays occur due to problems with the connection of your trading terminal to the trading server or due to a poor Internet signal.

If you trade from a computer try to use a wired Internet rather than Wi-Fi. The signal speed will be higher. Try to provide yourself at home with the highest quality connection that works without delays or interruptions. If you trade from your phone, make sure you are connected to a high-quality Wi-Fi source or use high-speed mobile Internet.

Turning off all programs that use Internet traffic might also increase the chances of faster order execution. This includes any instant messengers, social networks, downloading files, or watching videos online.

Use Higher Timeframes

Scalpers that use minimal timeframes, such as M5, most often encounter slippage. For them, a jump of 1-2 points can play a huge role. If you trade on the daily chart, such leaps will be almost invisible to you.

Change the Account Type

I think this point should be used as a last resort. Since slippage occurs due to the specifics of the market execution, you can change the Interbank account to Standard, for example. However, I don’t advise you to change your entire trading routine due to rare cases of slippage.

Avoid Trading During Major News Releases

Due to the unpredictability of market behavior during the important news releases many large Forex players, such as banks, try to protect themselves from huge losses and exit the market. Often, these players are liquidity providers. With their leave, the liquidity level decreases markedly. It causes the situation with the lack of free lots described above and the number of slippages increases.

You will not be able to influence the situation. If you don’t trade directly on the news, then leave the market 30 minutes before the release of an important event and come 60 minutes after.

Use Limit Orders

If you use pending orders in trading, then it is worth giving preference to the Limit orders rather than Stop ones. Stop orders are triggered only when the market reaches the price you need. The price for your limit order is sent to the server right away and a part of liquidity is sort of “reserved” for you. This increases the chances that the pending order will be executed exactly with the quote you need.

Think About Slippage Tolerance

Slippage tolerance is the maximum percentage of slippage you can accept. Various brokers often integrate this function to prevent losses from significant price changes while you place orders.

Check Your Broker's Attitude to Slippage

You can clarify it in a couple of ways.

  • Backtesting your trading strategy will help to understand how much slippage your strategy would have experienced under different market conditions.
  • Some Forex brokers share slippage reports so their clients understand the average amount. You can use it to compare various brokers and choose the best fit for you.
  • You can choose a demo account to compare the execution prices to your expected prices. It is also an excellent solution to check the broker's honesty. Compare live account slippage with demo account slippage to see if there are any differences.
  • Contact your broker. You can always contact your Forex broker about their slippage policy. Many brokers try to reduce slippage or offer a slippage protection policy to be more competitive. Use it to find the best broker that will reduce the negative influence of slippage on your deposit.

To Summarize

Do not treat slippage as something bad. This is the first sign that your broker’s trading is real and your order is actually being displayed on the interbank market. Do not fight with slippage, don’t fall into despair, and don’t try to change the broker right away. Use the tips in this article to reduce your chance of slippage and keep making money.

Popular articles

Stay tuned for the latest FXCL stories

trading mindset beginners novice traders trading strategy losses forex mistakes trading habits trading plan forex trading women in Forex female traders risk management broker profit trading instruments pairs price advantages of forex leverage FXCL investments copy trading advantages of Forex social trading professional traders trading psychology demo trading buy/sell bid/ask spread Metatrader 4 market analysis technical analysis fundamental analysis trade trading platform Forex trading novice trading dealing with losses charts timeframe indicators MetaTrader 4 trading routine support level resistance level trend low-hanging fruit stop loss loss trading history long-term goals open trade close trade daily charts swing trading intraday trading scalping trading setup Forex traders bullish bearish resistance support MA 200 trend trading professional trading EMA EA daily chart weekly chart Forex news highs lows account type cent trading Mini Micro Cent Partnership commission fees trading terms Stop Loss news trading economical calendar major news release currency pair currency rate national currency trading journal trades profit/loss emotions news release positions size Expert Advisors platform trading robot cryptocurrency volatility day trading position size lot account types cent accounts Mini account ECN Copytrade ECN accounts swap-free minimum deposit order execution liquidity providers demo accounts real account low-risk trading EUR/USD economic calendar majors cross-currencies exotic currencies base currency quote currency quotes bid ask Brexit United Kingdom European Union GBP Euro GDP WTO price levels moving average 4-hour chart 1-hour chart bulls bears false breakout cross-currency USD price action pin bar trading inside bar trading hands off breakeven stop loss 50% stop loss pin bar high-frequency trading position trading swings breakout strategy trading style Entry order Take Profit hammer shooting star inside bar pinocchio bar head and shoulders harami risk to reward ratio trading calculator trader’s age emotion control stop-hunting false signal trading session New York session Asian session non-farm payrolls fed rates decision central banks mentor teacher Forex education Forex books candlesticks bonuses tradable bonus no deposit bonus deposit bonus cashback pending orders counter-trend trading risk-to-reward ratio 1-2% rule uptrend downtrend news releases slippage emotional trading stop orders limits orders trailing Stop correlation Correlation Matrix EURUSD EURJPY RSI Overbought/Oversold indicator doji morning start candlestick pattern liquidity London session gap requote US dollar greed excessive trading Expert Advisor trading instrument Twitter Trump euro Canadian dollar Japanese yen Mexican peso currency pairs Fed China economic news currency wars USA interest rates trade agreement H1 H4 D1 sell trade buy trade price level trading system COVID-19 coronavirus lockdown checklist Default mode network Nonfarm Payrolls intraday traders lot size Stop Out margin breakeven pip point entry price chart candles weekly candle daily candle engulfing candle Doji W1 fears money management trading signals Charles Dow Dow theory primary trend Relative Strength Index signals market noise trading volume oversold/overbought corrections candle M30 GBPUSD GBPJPY pending order fundamentals Interbank order Stop order Limit order Standard account Interbank account liquidity provider M5 chart gold XAUUSD Chinese yuan flat US Dollar Fed Interest Rates inflation level XPTUSD platinum XAGUSD silver USDCNY Chinese Yuan instruments swap trading hours Buy Stop Sell Stop Average True Range ATR range sideways range price level trading scripts Excel tables entry point equity balance applications highs and lows RSI Fibonacci terminal server proxy OS Windows XP self-trading Forex advantages gap trading Fibonacci levels USDJPY Buy Limit Cherry Blossom market cycle mark-up mark-down consolidation distribution long positions short positions double bottom triple bottom double top triple top pattern signal presidential cycle Elliott wave Kondratiev wave Forex terminology quote standard lot mini-lot micro-lot cross pairs exotic pairs counter-currency terminology Margin Call long position short position buy sell candlestick chart bar chart line chart range market channel high low ADX OHLC patterns profit level martingale aggressive EAs VPS demo account EA tester trading signal chasing the market clicking the button oil trading lot EUR cent account Forex mentor novice trader emotions control fear psychological level round numbers Key Levels indicator MetaQuotes iOS Android mobile trading mobile terminal VPS server financial portals day trader position closing short timeframe fast trading news site news portal FXStreet Investing.com Forex Factory ForexLive DailyFX CPI PPI economic indicators Non-Farm Payrolls monetary policy FOMC retail sales inflation rates program installation intuition apps ECN brokers market makers financial markets indices commodities stock metals trading robots Forex mentors confidence bias low-frequency trading set and forget end-of-day trading exit trade auto-trading OCO trailing stop auto-management competitive advantage partnership IB referral Introducing Broker Sub-IB EURGBP EURCHF Donald Trump Twitter exotics minors trading patterns wedges pennants triangles breakout trading range trading confident trading trading goals japanese candles stars morning star evening star Japanese candles inverted hammer hanging man abandoned baby spinning top spinning bottom inverted head and shoulders trading figure trading pattern beginner mistakes unrealized profit/loss Forex scammers money managers overtrading Trader’s Cabinet MT4 trading styles exit point Forex myths currency bitcoin ethereum tether litecoin tick chart education European session cross currency GBP/USD GBP/JPY M15 intraday strategy American session USD/CAD M5 Bollinger Bands MAM investing high water mark currency market stock market cryptocurrency market figures diamond divergent triangle symmetrical triangle reversal signal financial intelligence financial education long-term investing triangle ascending triangle descending triangle risk control stocks Forex mutual fund EUR/AUD AUD Australian Dollar Australia ECB RBA demo live live account spike bearish spike bullish spike breathing techniques meditation unusual trading tips useful habits nutrition intermittent fasting Three indians pamm mam expert advisors start-up capital business Forex business oversold overbought reverse signals 15-minute chart full-time trading discipline drawdown inflation devaluation IDR LAK export Russia regulations regulators Central Bank quantitative easing quantitative tightening Donald Trump Joe Biden coins indexes DXY ICO Mrs. Watanabe beginner trader carry trading young traders women traders productivity self-discipline rectangle sideways channel trend figure Alexander Elder John Murphy Jack Schwager limit order leaving Forex useful tips motivation on Forex expanding triangle 5 candlesticks signal confirmation loss control currencies Germany market execution instant execution taxes laws remote trading withdrawals time management British pound BoE unemployment rate interest rate breakout Sydney session Tokyo session disposition effect continuation pattern golden rule enter trade high volatility risk trading trading discipline trading strategies Forex risks trading risks systemic risks technical risks force majeure criminal risks self-education self-study professional education Forex forecasts partnership program Forex bonuses Forex contests self-employed trader bars harami cross engulfing belt hold sandwich piercing line dark cloud cover marubozu three black crows upside gap two crows multitasking wedge figure trading sessions major trend million financial literacy budget goal setting Forex resources Myfxbook useful tools account analysis account monitoring trading analysis economic sentiment consumer price losing streak perfectionism consistent profits starting capital initial investment market psychology japanese candlesticks PAMM trust management money manager holidays market sentiment CHF CAD Great Britain pound Swiss Frank reserve currency averaging morning routine initial capital potential profit reverse pattern rounded bottom rounded top saucer inverse saucer IB Program IB Commission Sharing reversal patterns deposits payment methods payment systems local transactions trader’s block market balance
trading mindset beginners novice traders trading strategy losses forex mistakes trading habits trading plan forex trading women in Forex female traders risk management broker profit trading instruments pairs price advantages of forex leverage FXCL investments copy trading advantages of Forex social trading professional traders trading psychology demo trading buy/sell bid/ask spread Metatrader 4 market analysis technical analysis fundamental analysis trade trading platform Forex trading novice trading dealing with losses charts timeframe indicators MetaTrader 4 trading routine support level resistance level trend low-hanging fruit stop loss loss trading history long-term goals open trade close trade daily charts swing trading intraday trading scalping trading setup Forex traders bullish bearish resistance support MA 200 trend trading professional trading EMA EA daily chart weekly chart Forex news highs lows account type cent trading Mini Micro Cent Partnership commission fees trading terms Stop Loss news trading economical calendar major news release currency pair currency rate national currency trading journal trades profit/loss emotions news release positions size Expert Advisors platform trading robot cryptocurrency volatility day trading position size lot account types cent accounts Mini account ECN Copytrade ECN accounts swap-free minimum deposit order execution liquidity providers demo accounts real account low-risk trading EUR/USD economic calendar majors cross-currencies exotic currencies base currency quote currency quotes bid ask Brexit United Kingdom European Union GBP Euro GDP WTO price levels moving average 4-hour chart 1-hour chart bulls bears false breakout cross-currency USD price action pin bar trading inside bar trading hands off breakeven stop loss 50% stop loss pin bar high-frequency trading position trading swings breakout strategy trading style Entry order Take Profit hammer shooting star inside bar pinocchio bar head and shoulders harami risk to reward ratio trading calculator trader’s age emotion control stop-hunting false signal trading session New York session Asian session non-farm payrolls fed rates decision central banks mentor teacher Forex education Forex books candlesticks bonuses tradable bonus no deposit bonus deposit bonus cashback pending orders counter-trend trading risk-to-reward ratio 1-2% rule uptrend downtrend news releases slippage emotional trading stop orders limits orders trailing Stop correlation Correlation Matrix EURUSD EURJPY RSI Overbought/Oversold indicator doji morning start candlestick pattern liquidity London session gap requote US dollar greed excessive trading Expert Advisor trading instrument Twitter Trump euro Canadian dollar Japanese yen Mexican peso currency pairs Fed China economic news currency wars USA interest rates trade agreement H1 H4 D1 sell trade buy trade price level trading system COVID-19 coronavirus lockdown checklist Default mode network Nonfarm Payrolls intraday traders lot size Stop Out margin breakeven pip point entry price chart candles weekly candle daily candle engulfing candle Doji W1 fears money management trading signals Charles Dow Dow theory primary trend Relative Strength Index signals market noise trading volume oversold/overbought corrections candle M30 GBPUSD GBPJPY pending order fundamentals Interbank order Stop order Limit order Standard account Interbank account liquidity provider M5 chart gold XAUUSD Chinese yuan flat US Dollar Fed Interest Rates inflation level XPTUSD platinum XAGUSD silver USDCNY Chinese Yuan instruments swap trading hours Buy Stop Sell Stop Average True Range ATR range sideways range price level trading scripts Excel tables entry point equity balance applications highs and lows RSI Fibonacci terminal server proxy OS Windows XP self-trading Forex advantages gap trading Fibonacci levels USDJPY Buy Limit Cherry Blossom market cycle mark-up mark-down consolidation distribution long positions short positions double bottom triple bottom double top triple top pattern signal presidential cycle Elliott wave Kondratiev wave Forex terminology quote standard lot mini-lot micro-lot cross pairs exotic pairs counter-currency terminology Margin Call long position short position buy sell candlestick chart bar chart line chart range market channel high low ADX OHLC patterns profit level martingale aggressive EAs VPS demo account EA tester trading signal chasing the market clicking the button oil trading lot EUR cent account Forex mentor novice trader emotions control fear psychological level round numbers Key Levels indicator MetaQuotes iOS Android mobile trading mobile terminal VPS server financial portals day trader position closing short timeframe fast trading news site news portal FXStreet Investing.com Forex Factory ForexLive DailyFX CPI PPI economic indicators Non-Farm Payrolls monetary policy FOMC retail sales inflation rates program installation intuition apps ECN brokers market makers financial markets indices commodities stock metals trading robots Forex mentors confidence bias low-frequency trading set and forget end-of-day trading exit trade auto-trading OCO trailing stop auto-management competitive advantage partnership IB referral Introducing Broker Sub-IB EURGBP EURCHF Donald Trump Twitter exotics minors trading patterns wedges pennants triangles breakout trading range trading confident trading trading goals japanese candles stars morning star evening star Japanese candles inverted hammer hanging man abandoned baby spinning top spinning bottom inverted head and shoulders trading figure trading pattern beginner mistakes unrealized profit/loss Forex scammers money managers overtrading Trader’s Cabinet MT4 trading styles exit point Forex myths currency bitcoin ethereum tether litecoin tick chart education European session cross currency GBP/USD GBP/JPY M15 intraday strategy American session USD/CAD M5 Bollinger Bands MAM investing high water mark currency market stock market cryptocurrency market figures diamond divergent triangle symmetrical triangle reversal signal financial intelligence financial education long-term investing triangle ascending triangle descending triangle risk control stocks Forex mutual fund EUR/AUD AUD Australian Dollar Australia ECB RBA demo live live account spike bearish spike bullish spike breathing techniques meditation unusual trading tips useful habits nutrition intermittent fasting Three indians pamm mam expert advisors start-up capital business Forex business oversold overbought reverse signals 15-minute chart full-time trading discipline drawdown inflation devaluation IDR LAK export Russia regulations regulators Central Bank quantitative easing quantitative tightening Donald Trump Joe Biden coins indexes DXY ICO Mrs. Watanabe beginner trader carry trading young traders women traders productivity self-discipline rectangle sideways channel trend figure Alexander Elder John Murphy Jack Schwager limit order leaving Forex useful tips motivation on Forex expanding triangle 5 candlesticks signal confirmation loss control currencies Germany market execution instant execution taxes laws remote trading withdrawals time management British pound BoE unemployment rate interest rate breakout Sydney session Tokyo session disposition effect continuation pattern golden rule enter trade high volatility risk trading trading discipline trading strategies Forex risks trading risks systemic risks technical risks force majeure criminal risks self-education self-study professional education Forex forecasts partnership program Forex bonuses Forex contests self-employed trader bars harami cross engulfing belt hold sandwich piercing line dark cloud cover marubozu three black crows upside gap two crows multitasking wedge figure trading sessions major trend million financial literacy budget goal setting Forex resources Myfxbook useful tools account analysis account monitoring trading analysis economic sentiment consumer price losing streak perfectionism consistent profits starting capital initial investment market psychology japanese candlesticks PAMM trust management money manager holidays market sentiment CHF CAD Great Britain pound Swiss Frank reserve currency averaging morning routine initial capital potential profit reverse pattern rounded bottom rounded top saucer inverse saucer IB Program IB Commission Sharing reversal patterns deposits payment methods payment systems local transactions trader’s block market balance