Slippage is the difference between the price you expect to receive on a trade and the actual price at which your order is filled. It occurs because the market moves between the time you submit an order and the time it’s executed. In forex, slippage is most common during high-volatility events and on less liquid currency pairs.
How Slippage Works
Negative slippage (most common)
You place a buy order at 1.0850, but the market moves against you during execution. You’re filled at 1.0852 — 2 pips worse than expected. Your trade starts 2 pips further behind.
Positive slippage
You place a buy order at 1.0850, but the market moves in your favor during execution. You’re filled at 1.0848 — 2 pips better than expected. Less common but it happens.
Example impact
| Scenario | Expected Fill | Actual Fill | Slippage | Impact (1 std lot) |
|---|---|---|---|---|
| Normal conditions | 1.0850 | 1.0851 | -1 pip | -$10 |
| News event | 1.0850 | 1.0858 | -8 pips | -$80 |
| Weekend gap | 1.0850 | 1.0870 | -20 pips | -$200 |
When Slippage Occurs
Market orders are most susceptible to slippage because they fill at the next available price. If the market moves between your click and execution, you get slippage.
Stop loss orders convert to market orders when triggered, making them vulnerable to slippage — especially during fast markets.
Limit orders (including take profits) generally don’t experience negative slippage because they only fill at the specified price or better.
Causes of Slippage
- High-impact news — NFP, FOMC, ECB decisions cause rapid price movement
- Low liquidity — Asian session, holiday periods, exotic pairs
- Weekend gaps — Market opens at a different price from Friday’s close
- Large position sizes — Bigger orders take longer to fill, especially on less liquid pairs
- Broker execution speed — Slow brokers or distant servers increase execution time
Minimizing Slippage
- Trade during peak liquidity hours (London session, NY overlap)
- Avoid holding positions through major scheduled news events
- Use limit orders for entries when possible
- Choose brokers with fast execution and low latency
- Reduce position sizes on exotic pairs
Tracking Slippage in Your Journal
Recording slippage per trade allows you to:
- Quantify total slippage cost per week/month
- Identify high-slippage conditions — specific times, pairs, or events
- Evaluate broker quality — consistent high slippage may indicate poor execution
- Adjust your strategy — if slippage is eating your edge, you may need to avoid certain conditions
PipJournal helps you log and track slippage on every trade, calculating the cumulative impact on your performance over time.
