You set an order at one price and it fills at another. That gap is slippage — a normal feature of trading on a live, moving market, but one that can quietly raise your costs and, in fast conditions, push losses beyond what you planned.
The short answer
Slippage is the difference between the price you expected when you placed an order and the price at which it was actually executed. If you click to buy at 1.0850 but get filled at 1.0852, you experienced 2 points of negative slippage. It can also be positive — filling at a better price than expected.
Why slippage happens
Markets move continuously, and between the moment you send an order and the moment it executes, the price can change. The main drivers:
- Volatility — fast-moving prices are harder to fill at a single level.
- Liquidity — thin order books mean your order "walks" to worse prices.
- Latency — delays between your platform, the broker and the market.
- Order type — market orders prioritise speed over price, so they're more exposed.
When slippage is worst
Slippage spikes in predictable situations: around high-impact economic releases, at session opens, during major news, and in illiquid instruments. This is closely related to spread, which also widens in the same conditions — together they define your real cost of entry and exit.
A practical example
You hold a position with a stop loss at 1.0800. A surprise news release causes EUR/USD to gap straight through that level, and your stop fills at 1.0788 instead. That extra 12 points is negative slippage on the exit — and it's why your worst-case loss can exceed your planned risk in volatile markets. Sizing with that possibility in mind is part of good position sizing.
How to reduce its impact
- Trade liquid instruments during active sessions.
- Avoid firing market orders into major news.
- Use limit orders where appropriate to control fill price.
- Choose a broker with strong execution — see our broker reviews and broker selection guide.
- For automated trading, a low-latency VPS reduces execution delay.
Why it matters for automation
Expert Advisors are particularly sensitive to slippage because they execute mechanically, often around volatile conditions. A strategy that looks profitable in a backtest using idealised fills can underperform live once real slippage is included — one of the reasons forward testing matters, as covered in the EA Automation Guide.
Risk disclaimer: This article is educational content only and is not financial advice. Slippage can cause trades, including stop losses, to fill at worse prices than expected. Trading involves significant risk of loss. Past performance does not guarantee future results. You are responsible for your own decisions.
Frequently asked questions
Is slippage always bad?
No. Slippage can be negative (a worse price than expected) or positive (a better one). It's a normal part of trading on a moving market. The concern is consistent, large negative slippage, which raises your real trading costs.
When is slippage worst?
Around high-impact news, at market opens, and in thin or volatile conditions, when prices move fast and liquidity is lower. Market orders during these windows are most exposed to slippage.
How can I reduce slippage?
Trade liquid instruments in active sessions, avoid placing market orders into major news, consider limit orders where appropriate, and choose a broker with strong execution. A low-latency VPS can also help for automated trading.
Does slippage affect stop losses?
Yes. A stop loss becomes a market order when triggered, so in fast markets it can fill at a worse price than your stop level. This is why worst-case loss can exceed your planned risk during volatile conditions.