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What is Slippage

The word "Slippage" with trading the markets refers to the difference between the expected price of a trade and the actual price it was executed, this can happen at any time, but traders will see it happen very often during periods of high volatility or action in the markets, this happens mostly with market orders. Also, slippage happens with a large position size where there is a limited volume at the selected price. 

Slippage is most common in the Forex market during periods of high volatility like a high-impact news event.


Slippage can happen when the bid/ask spread changes between the time a market order is submitted and the time an exchange executes the order.


Example of Slippage

A market order may be executed at a lower or a higher favourable price than the trader originally intended and when this happens:

Negative slippage - the ask price has increased in a buy trade or the bid price has decreased in a short trade.

Positive Slippage - the ask has decreased in a long trade or the bid has increased in a short trade.


How to Protect Your Trades?

Traders can protect themselves from slippage by placing limit orders and avoiding market orders.


Forex Trading & Slippage

The Forex market often has slippage during periods of high volatility like a news event or when the currency pair is trading outside the peak market hours when this happens most cTrader Brokers will execute the trade at the next best price and this causes the slippage of the intended price.