Slippage
Also called Execution slippage, Price slippage, Slippage tolerance
Slippage is the difference between the price you expected when you placed an order and the price you actually got. It happens when the price moves before your order is filled.
Slippage can cost you money even on a trade that goes your way. It also makes a loss bigger than the risk you planned if a stop-loss fills late. If you know when it happens and how to measure it, you can plan for it.
Why your fill price can differ from the price on screen
The price on your screen is the last quote your platform received. Your order still has to travel to your broker and get matched with the other side. If the market moves in that short time, you get the next price available.
Slippage can work against you or for you. Negative slippage gives you a worse price than you asked for. Positive slippage gives you a better one. Either way, the price you got is not the one you planned your trade around.
Slippage is most likely when:
- big news comes out and prices jump in a few seconds;
- the market is thin, for example in quiet hours or on exotic pairs, so few orders are waiting at each price;
- the market opens after the weekend with a gap;
- your order is large compared with the orders waiting at the best price.
Slippage versus spread: a common misread
Many traders blame the spread for every bad fill. The difference is simple. You can see the spread (the gap between the bid and ask price) before you click. Slippage only shows up after the order is filled.
To tell them apart, compare your fill with the quote at the moment you clicked. If the fill is worse than the ask (when buying) or the bid (when selling) at that moment, that extra gap is slippage. The weekly fill review in the checks below shows how to record that quote.
What slippage costs you: a worked example
The numbers below are an illustrative example. You buy 1 standard lot (100,000 units) of EUR/USD at market. The ask shows 1.10000 when you click, but a data release hits and you are filled at 1.10030.
The chart above shows the 3-pip gap between the price you asked for and the price you got. On a USD-quoted pair, one pip on a standard lot is worth $10. Your stop-loss was 20 pips from where you planned to enter, at 1.09800. Because you entered higher, it is now 23 pips away.
You can reuse this formula on any trade: slippage cost = slippage in pips × pip value per lot × lots. If your stop-loss is also hit with slippage, that cost is added to the loss too.
Where you control slippage on your trading platform
Many platforms let you set a maximum deviation (sometimes called slippage tolerance) in the order window. It is usually measured in points or pips. If the fill would be further away than that limit, the order is rejected or requoted instead of filled.
The order type you choose matters too:
| Order type | Can it slip? | Trade-off |
|---|---|---|
| Market order | Yes, both ways | Fills almost always, but the fill price can differ from the quote |
| Limit order | Fills at your price or better | May never fill if the price does not come back |
| Stop order and stop-loss | Yes, it becomes a market order once triggered | Fills even in a fast market, but can be far from your level after a gap |
In this illustrative example, the stop sits at 1.0950, but Monday opens at 1.0925 and the stop fills there. That is 25 pips past the stop, or $250 of extra loss on 1 standard lot at $10 per pip.
Checks before you trade
- Add a slippage buffer to your risk. Take the average negative slippage from your last 20 fills (see the weekly review below for how to measure it), or your worst fill around news, and add it to your stop distance. Then size the trade on the total. For example, a 20-pip stop plus a 3-pip buffer means you size the position on 23 pips.
- Cut the lot size or skip the trade when the buffer is large compared with your stop. This is a rule of thumb, not a fixed standard: a common cut-off is about a quarter of the stop distance. Tight stops leave little room for slippage.
- Check the economic calendar. If a major release is due within minutes, wait or use a limit order.
- Review your fills every week. Many trade histories show only the fill price, so record the quote yourself. When you click, note or screenshot the ask (when buying) or the bid (when selling). Then compare it with the fill price in your trade history. If slippage is always negative and never positive, ask your broker how orders are executed.
- Do not trust demo fills. A demo account often fills more smoothly than a live account in fast markets.
- Hold fewer trades over the weekend if you use tight stops. Opening gaps can jump past a stop-loss completely.
FAQ
What does slippage tolerance mean when trading crypto or meme coins?
It is the largest price change, usually a percentage, that you accept before a swap is cancelled. Thinly traded coins move a lot on a single order. If the tolerance is too low, the trade fails. If it is too high, you may accept a much worse price.
Does slippage happen in stocks too?
Yes. It is common at the market open, after earnings, and in shares with low volume, for the same reason: the price moves before your order is matched.
Can I avoid slippage completely?
No. Limit orders remove negative slippage on the fill price, but they may not fill at all. Every order type trades some price certainty for fill certainty.