Slippage
Slippage is the difference between the price you asked for and the one you actually got. It happens when there is not enough volume at the requested price — on news, at the open, and on a stop triggered at market. It is measured in pips and turned into cash through pip value, just like the spread. Run this calculation now: lot size and position size calculator
Slippage is the gap between the requested price and the executed one. It shows up when volume is missing at the requested price, and it is measured in pips like the spread.
Why it happens, and why it is not the broker's fault
Every market order is filled at the best price available in the order book at that instant. If the size you asked for does not fit at the best price, the rest fills at the next one, and the next — and the average comes out worse than the screen showed. That is slippage, and it does not depend on anyone's goodwill.
It can go your way: in a market moving in your favour, the fill comes out better than the request. In practice the distribution is lopsided, because the moments with thin liquidity are also the moments of sharp moves against whoever entered late.
A limit order takes no price slippage: it fills at the requested price or not at all. What it takes is the other side of the same coin — missing the move.
The three moments it shows up
Data releases and rate decisions: the book empties out in the seconds around the time, and a market order there can fill dozens of pips away. That is why several firms forbid trading in a news window — the ban is about this risk, not about the trader's opinion.
Session open and close: the gap between one close and the next open has no price in between. A stop inside the gap fills at the open, not at the marked level.
A triggered stop: a stop is a market order born the moment price touches the level. In a fast move, it is born at exactly the worst moment for liquidity.
What it costs, and why it closes funded accounts
Slippage cost = pips of difference × pip value. On 0.5 lots of EURUSD, 3 pips of slippage is 15 dollars — and if the planned risk was 50 dollars, the trade lost 30% more than agreed.
On a funded account the problem is not the average cost; it is the worst case. The daily limit is checked against the executed result, not the planned one. A stop meant to cap at 1% that fills at 1.4% on a news day can close the account through a rule the trader believed they were respecting.
The defence is not predicting slippage: it is leaving room. Sizing the position against the limit minus a margin, instead of the full limit, is what turns a bad day into a loss rather than a closed account.
FAQ
Are slippage and spread the same thing?
No. You pay the spread on every trade and you know how much before entering; slippage only appears when liquidity is missing at the requested price, and you only know after the fill. Both are measured in pips and both add to cost.
Can slippage be eliminated?
On entry, yes, with a limit order — which in exchange may not fill. On the stop, no: a stop is a market order by definition. What you control is position size and the hours you trade.
Does the firm account for slippage when checking the limit?
The firm checks the executed result on the account. What happened between the requested and the executed price is not part of the conversation — which is why the room has to be in your sizing, not in their maths.