You press buy at 1.0850. The trade opens at 1.0853. That small gap is slippage: the difference between the price you expected and the price you actually got.
Three pips do not sound like much. But slippage happens on the entry, on the exit, and often on the stop loss too. Over a year of trading it can quietly eat a large part of your profit. This article explains what slippage is, why it happens, how to measure what it costs you, and how to get less of it.
What slippage means, in one sentence
Slippage is the difference between the price you asked for and the price your order was filled at. It can work against you (negative slippage) or for you (positive slippage). Most traders only notice the negative kind.
Slippage is not a fee and it is not a mistake by your broker. It is the normal result of one thing: between the moment you click and the moment your order reaches the market, the price can move.
Why slippage happens
Four things cause almost all slippage.
- Fast markets. During news releases, central bank decisions or a sudden move, prices can change several times a second. Your order arrives a moment later and gets the new price.
- Thin liquidity. When few traders are active, there are fewer orders to match yours. This happens at night, around holidays, in the first minutes of a session and in exotic pairs or small coins.
- Large orders. A big order uses up the best prices in the order book and fills the rest at worse prices. Retail traders rarely see this on EURUSD, but they do see it on small crypto coins.
- Delay. Every order travels from your screen to your broker and then to the market. A slow internet connection or a busy platform adds milliseconds, and in a fast market milliseconds cost money.
Market orders, limit orders and stop orders
The type of order decides how much slippage you can get.
- A market order says "fill me now at the best available price". It always fills, but the price is not guaranteed. This is where most slippage lives.
- A limit order says "fill me at this price or better". It cannot slip against you. The risk is that it does not fill at all and the move leaves without you.
- A stop loss order becomes a market order when the price reaches your stop level. In a fast move it can fill well past that level. This is why a stop at 20 pips can close at 25 pips of loss. The stop loss protects you from a disaster, but it does not promise an exact price.
A quick rule: use limit orders to enter when you can wait, and accept market orders when the setup is time sensitive.
What slippage costs over a year
Let us count. You trade EURUSD, 20 trades a month, 0.5 lots. Average slippage is 0.4 pips on the entry and 0.4 pips on the exit. One pip on 0.5 lots is about 5 dollars.
- Per trade: 0.8 pips × 5 dollars = 4 dollars
- Per month: 20 × 4 = 80 dollars
- Per year: 960 dollars
That is almost 1,000 dollars from a "small" 0.4 pip difference, before any slippage on stop losses. If you trade news or thin hours, the real number is higher. The point is not to scare you. The point is that slippage is a cost, like spread and commission, and costs can be measured and reduced.
How to measure your own slippage
Your broker report shows the fill price. Your plan, chart or alert shows the price you wanted. The difference is your slippage. Write both down for a few weeks and you will see a pattern:
- Which hours give you the worst fills (usually the first minutes of a session and news time)
- Which symbols slip the most
- Whether your stop losses fill far from the level you set
A trading journal makes this easy. In SetupBook you record the planned price and the real fill on each trade; the net P&L already includes the slippage, so the cost shows up in your numbers instead of hiding in your broker statement.
Five ways to reduce slippage
- Avoid the first two minutes of a session and the minute around big news. This one change removes most extreme fills.
- Use limit orders for planned entries. If the market does not come to your price, let it go.
- Trade liquid symbols in liquid hours. Major pairs during London and New York, large index futures during the cash session, the top coins by volume.
- Keep orders small relative to the market. If you trade a small coin, split a large order into parts.
- Check your connection and your broker. A VPS or a wired connection helps when you trade fast markets. Brokers with direct market access (ECN or STP) usually fill faster than market makers, but compare real fills, not promises.
Slippage on prop firm accounts
If you trade a prop firm account, slippage matters twice. A stop that fills 5 pips past the level can push your day over the daily loss limit even though your plan was inside it. Give yourself a small buffer: if the limit is 2 percent, plan your worst day at 1.5 percent.
When slippage is good
Positive slippage exists. If you place a market sell and the price jumps up before the fill, you get a better price than you clicked. Good brokers pass positive slippage to you. If you only ever see negative slippage over hundreds of trades, that is worth a question to your broker.
Frequently asked questions
Is slippage the same as the spread?
No. The spread is the difference between the buy and the sell price at one moment. Slippage is the difference between the price you expected and the price you got. You pay the spread on every trade; you get slippage only when the price moves between your click and your fill.
Can a stop loss have slippage?
Yes. A stop loss becomes a market order when the price reaches it, so in a fast market it can fill past your level. A guaranteed stop loss avoids this, but brokers charge extra for it and not all offer it.
How much slippage is normal?
On major forex pairs during busy hours, a fraction of a pip is normal. Around news, several pips are common. In small crypto coins or exotic pairs, slippage can be many times larger. Measure yours for a month and you will know what is normal for your trading.
Does slippage happen on limit orders?
Not against you. A limit order fills at your price or better. The only risk is that it never fills.
Make slippage visible
Slippage is one of the costs that most traders never add up. Log the price you wanted and the price you got, and the journal does the rest. Start your journal free and see what your fills really cost.