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Is Slippage a Problem for Your Forex Trading?

September 1, 2014 by

Slippage is considered a serious problem among Forex traders who share their problems in broker reviews and on forums. The most significant effect of slippage is felt during the major news releases and other high-volatility bursts. The loss resulting from slippage can sometimes reach the same value as the original stop-loss of the slipped trade.

Following factors contribute to excessive slippage losses:

  • Usage of stop orders (stop-loss or pending stop buy/sell).
  • Short-term trading.
  • High market volatility.
  • Slow trade execution on broker’s side.
  • Broker’s execution policies.

My own experience with slippage is pretty limited. Despite the fact that nearly all of my trades are entered using pending stop orders and use active stop-loss orders, I had only two or three cases of slippage during the past two years. The main factor contributing to this lack of damage due to slippage is that I do not aim to trade during the news and that I trade rarely — about 10–20 times per year. Perhaps, my choice of a broker (AGEA) also played some role in this.

My biggest slippage since early 2012 was 0.6 pips on a stop-loss execution of the failed EUR/AUD trade. You can see the entry level marked with a blue horizontal line. The original stop-loss level is marked with a green horizontal line (1.35441). The actual executed stop-loss is shown with a red horizontal line (1.35447). The entry times are shown with the vertical lines for reference.

EUR/AUD - Slippage Example

Obviously, traders do not need to pay attention when slippage is such low. Unfortunately, not all traders are as lucky as me. As far as I know, many of them suffer from serious levels of slippage. Are you one of such traders? Please share your story.

How big is your average trade slippage?

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If you want to talk about how you avoid slippage or how your broker manages to minimize your slippage on trades, please use the commentary form below.

2 Responses to “Is Slippage a Problem for Your Forex Trading?”

  1. Singapore Forex Trader

    The slippage is happening with almost every Forex broker. I like trading Forex on the news, but sometimes the market jumps so fast, that you cannot see the price change gradually. It happens with me a lot and I hate it as it leaves me out of the control over my trades.


  2. Warren Willis

    The above brokerage has been set up to not slip traders.. It has been set up by a trader for traders..You do not have to accept the norm of brokers empting your account… This brokerage only makes money on the spread.It needs you to be profitable to make money


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