What Is Slippage in Trading? Why Your Fill Price Differs
Slippage is the difference between the price you expected and the price you got. It happens on every market order.
Slippage is the difference between the price at which you placed an order and the price at which it was actually filled. It is a normal feature of market trading, not a broker error — though some brokers manage it better than others.
Why slippage happens
When you place a market order, you are asking for immediate execution at the best available price. In a fast-moving market, the price can change between the moment you click and the moment your order reaches the market.
High slippage conditions:
- Around high-impact news releases (NFP, CPI, FOMC)
- During market open gaps (Sunday open, session transitions)
- On illiquid pairs or instruments
- During high volatility periods
Low slippage conditions:
- Major pairs during peak hours (London-New York overlap)
- Limit orders rather than market orders
- Brokers with direct market access (ECN/STP)
Positive vs negative slippage
Slippage can go either way.
Negative slippage: you buy at 1.0852 when you expected 1.0850. Costs you 2 extra pips.
Positive slippage: you buy at 1.0848 when you expected 1.0850. You got a better price than requested.
Reputable brokers pass positive slippage on to clients. Some market-maker brokers do not — check the execution policy before trading.
How slippage affects different strategies
For swing traders targeting 100+ pips, 1–2 pips of slippage is inconsequential.
For scalpers targeting 5 pips, 1–2 pips of slippage on entry and exit consumes 40–80% of the expected gain. This is why scalping requires tight-spread, fast-execution brokers.
For stop-loss orders during news, slippage can be severe. A stop at 1.0800 might fill at 1.0785 during a flash move, producing a much larger loss than intended.
Using limit orders to avoid slippage
A limit order fills only at your specified price or better — never worse. It eliminates entry slippage but may not fill at all if price moves away before the order executes.
For entries at key levels, limit orders are often preferable. For exits during fast markets, they carry the risk of the order not filling if price moves past the level.
Frequently Asked Questions
Is slippage the broker's fault?
Usually not. Slippage reflects real market conditions — rapid price movement faster than order execution. However, some brokers consistently produce worse slippage than others due to slower execution infrastructure or deliberate requoting. Compare execution statistics if available.
Can I prevent slippage completely?
No. Market orders always carry some slippage risk. Limit orders eliminate negative entry slippage but introduce the risk of non-execution. There is always a trade-off.
Does guaranteed stop loss prevent slippage?
Yes — a guaranteed stop loss (offered by some brokers for a fee) fills exactly at the specified price regardless of market conditions. It costs more than a standard stop but eliminates stop-slippage risk during news events.
Why is slippage worse around news?
News releases cause instantaneous large price jumps. The market gaps from one price to another without trading at the levels in between. Orders placed at intermediate prices fill at the nearest available price — which may be significantly different from the requested level.
Does slippage affect pending orders?
Yes. A buy stop order placed above current price will fill at the best available price when triggered — which may be above the stop level during a fast move. This is especially relevant for breakout entries and stop-loss orders.
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Not financial advice. This article is educational. Trading carries substantial risk and you can lose more than your deposit. See our risk disclaimer.
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