A Trader's Guide to Understanding Slippage

Slippage is the difference between the price you expected when you placed an order and the price at which it was actually executed. It occurs in all markets but is most pronounced during periods of high volatility or low liquidity.

Positive slippage — getting a better fill than requested — is possible but rarer. Negative slippage is the norm during news events, market opens, and thin overnight sessions. Understanding the mechanics helps you choose the right order type and time of execution.

How to minimise slippage: use limit orders instead of market orders where possible, avoid trading during major news releases unless you have a defined edge, and review your broker's execution statistics before sizing up.