What volatility does to your position sizeThe same one lot can risk $200 in a quiet week and $800 in a busy one. Nothing about the trade changed. The market did, and the position did not follow.What is slippage?
The price you saw and the price you got are different. That is normal, it goes both ways, and how a broker handles the two directions tells you more than its advertised spread does.
You click buy at 1.1000 and the fill comes back at 1.1002. The two-pip difference is slippage: the gap between the price you expected and the price you actually received.
It is usually described as a cost, and half the time it is not. Slippage can be negative, positive or zero, and a broker passing through genuine market prices will produce all three. What matters is the distribution - how often each happens, how large they are, and whether the favourable ones reach you at all.
Which direction is which
Whether a higher fill is good or bad depends entirely on which way you are going, which is why the word alone is ambiguous.
| Order and fill | Result |
|---|---|
| Buy expected at $100, filled at $101 | Negative: you paid more |
| Buy expected at $100, filled at $99 | Positive: you paid less |
| Sell expected at $100, filled at $99 | Negative: you received less |
| Sell expected at $100, filled at $101 | Positive: you received more |
Why it happens: there is not one price
A quoted price is the best price available for a certain quantity. Beneath it sits a queue of other orders at slightly worse prices. If your order is larger than what is available at the top, the rest fills further down the queue, and your average price is worse than the one you clicked.
This is not the broker moving the price against you. It is the market genuinely not having enough at that level.
What a thin order book does to a large order
Suppose you want 1,000 shares and the sell side looks like this.
| Price available | Shares on offer |
|---|---|
| $100.00 | 200 |
| $100.05 | 300 |
| $100.10 | 300 |
| $100.20 | 500 |
The best offer was $100.00 and only 200 shares were there. Your order eats down the book.
The fill is not one price but four, and what you actually paid is their weighted average.
Weighted average fill on 1,000 shares
- 200 shares× $100.00$20,000
- 300 shares× $100.05$30,015
- 300 shares× $100.10$30,030
- 200 shares× $100.20$20,040
Average price paid$100.0858.5 cents a share worse than the quoted price, on an order that never touched a fast market or a news release.
A tight spread on a market with nothing behind it is a price for a quantity you are not trading.
The other cause: time
The second source is the delay between your click and the execution. Your order travels to the broker, is processed, reaches a venue, and is matched. In a quiet market nothing changes in that window. During an interest-rate decision, prices can move dozens of ticks inside it.
That delay is latency, and it is the one part of the problem infrastructure can address - which is why brokers publish execution speeds and why the range across our records is so wide.
Average execution speed as published by each broker, across all hundred records.
- 4msfastest recordedActivTrades. Under a hundredth of the slowest.
- 150msslowest recordedA window in which a fast market can move meaningfully.
- 37×the spread between themWider than the difference between most brokers' spreads.
Self-reported figures, recorded from each broker's own published material. Treat them as claims rather than measurements - which is exactly the point of the section below.
The fastest execution speeds in our records.
ActivTradesFCAFSC (Mauritius)+11:307.7/10
FxProFCACySEC+31:309.1/10
FP MarketsASICCySEC+41:307.9/10
IGFCAASIC+81:308.0/10
Global PrimeASICVFSC (Vanuatu)1:10007.2/10
HYCMFCADFSA (DIFC)1:5007.6/10
Speed is one component of execution quality. On its own it settles nothing.
The trade-off you actually control
Order type is the one lever that decides whether slippage can happen to you at all. There is no option that gives you both certainty of price and certainty of execution.
Market order: prioritises execution
You are instructing the broker to fill at the best price available, whatever that turns out to be.
The trade will almost certainly happen. The price is not promised, and in a moving market it can be meaningfully different from the one on screen.
This is what a standard stop-loss order becomes once it triggers.
Limit order: prioritises price
You are naming the worst price you will accept. A buy limit at $99 fills at $99 or better and should never fill above it.
The risk moves rather than disappearing: the order may not fill at all, leaving you out of a trade you wanted or still holding one you wanted to exit.
This is what a take-profit order normally is.
A stop-limit combines the two - a stop trigger with a price ceiling - and inherits the non-execution risk along with the price control.
Asymmetric slippage, and the question worth asking
Prices move both ways between click and fill, so a fair execution model should pass both to you. Asymmetric slippage is what happens when it does not: adverse movements are passed through while favourable ones are quietly retained at the requested price.
This is not visible in a spread comparison and it is not visible in an execution-speed figure. It shows up only in the distribution.
When it actually costs you something
Slippage matters in proportion to how far your trades are trying to travel. On a strategy with a 50-pip stop, one pip of slippage is 2% of the planned risk. On a five-pip scalp it is 20%, and the same execution quality has become the dominant cost of the strategy.
The same logic runs through risk-to-reward: a 1:2 setup where the stop routinely slips 10 pips past its trigger is not really a 1:2 setup. It is why backtests that assume perfect fills flatter short-term strategies so badly, and why demo results should not be read as execution evidence.
Reducing your exposure to it
- Trade instruments with real depth rather than obscure ones with tight quotes
- Keep order size proportionate to the market you are trading
- Use limit orders where the price matters more than certainty of getting filled
- Avoid placing market orders into scheduled announcements
- Treat a standard stop as a trigger, never as a guaranteed exit price
- Include realistic slippage when testing any short-target strategy
None of these removes it. Slippage is a property of moving markets, not a broker feature that can be switched off.
Questions people ask about slippage
Is slippage a fee?
No. It is a difference in execution price rather than a charge, and unlike a fee it can work in your favour.
Is slippage the same as spread?
No. Spread is the gap between bid and ask, visible before you trade. Slippage is the gap between the price you expected and the price you got, visible only afterwards. Both are real costs.
Can a limit order slip?
Not past its limit. A buy limit at $100 should not fill above $100, though it can fill below. What it can do instead is not fill at all.
Can stop losses slip?
Yes, and this is the single most important thing to understand about them. The stop price is a trigger; once reached, the order executes at the next available price, which during a gap can be far away.
Does faster execution eliminate slippage?
No. It shortens the window in which prices can move, which helps. It cannot create liquidity that is not there, and it cannot bridge a weekend gap.
Does a VPS reduce slippage?
It can reduce communication latency and keeps a platform running reliably, both of which help automated strategies. It does nothing about market movement or thin order books.
Is slippage evidence my broker manipulated the trade?
Not on its own - it happens naturally in moving markets. A consistent pattern of adverse fills with no favourable ones is a different matter, and that is a question about the distribution rather than any single trade.
Does a demo account show realistic slippage?
Generally not. Demo environments simulate prices and spreads but usually not live liquidity, queue position or market impact.
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