Slippage is the difference between price set by a trader vs the actual entry price for a trade. The difference mainly occurs due to latency between order place by a trader and execution.
It is a very regular issue among traders and can make difference between winning and losing $$$. Usually slippage is very small as forex market is fast and liquid.
There can be three outcomes to slippage.
a) NO slippage = Where the trade is executed at the exact price set by the trader
b) Positive Slippage = The order is placed and the best price available price changes few pips lower than our requested price.
c) Negative Slippage = The order is place and the best available price changes few pips higher than our requested price.
Can we Control Slippage?
The answer to this question is both yes and no.
Limit orders usually are filled at best possible price so there is no chance of negative slippage.
Market Range Orders are placed with a range. So if an order can't be placed within that range , the order will be cancelled and no trades will be opened so that way we could limit the amount of slippage in orders as well.
It is a very regular issue among traders and can make difference between winning and losing $$$. Usually slippage is very small as forex market is fast and liquid.
There can be three outcomes to slippage.
a) NO slippage = Where the trade is executed at the exact price set by the trader
b) Positive Slippage = The order is placed and the best price available price changes few pips lower than our requested price.
c) Negative Slippage = The order is place and the best available price changes few pips higher than our requested price.
Can we Control Slippage?
The answer to this question is both yes and no.
Limit orders usually are filled at best possible price so there is no chance of negative slippage.
Market Range Orders are placed with a range. So if an order can't be placed within that range , the order will be cancelled and no trades will be opened so that way we could limit the amount of slippage in orders as well.