What is Slippage in Forex & How to Avoid It?
Written by Akash Khanna
Edited by Samuel Black
Fact-checked by Lisa Khan
Last Updated – 12 June 2025
You’ve done your analysis. You’ve picked your currency pair. You click “buy”… and then — wait, what?! The price you got isn’t the price you saw? Welcome to the world of slippage — the forex trader’s sneaky little gremlin.
In this article, we’ll explore what slippage really means, why it happens (spoiler: it’s not always your forex broker’s fault), and what you can do to avoid it. Let’s break it all down — professionally, but with a little smirk where appropriate – exclusively only on BrokersinForex.com
- What is Slippage in Forex?
- Why Does Slippage Happen?
- Types of Slippage: Positive vs Negative
- How Forex Brokers Handle Slippage?
- Slippage During Volatile Market Conditions
- Strategies to Avoid or Reduce Slippage
- Choosing a Forex Broker That Minimizes Slippage
- Accept It, Control It, Don’t Let It Ruin Your Trades
- Frequently Asked Questions (FAQs)About Slippage
What is Slippage in Forex?
In forex trading, slippage occurs when your trade is executed at a different price than expected. This difference can be small — maybe a pip or two — or significant enough to make your palms sweat.
Let’s say you hit “Buy” on EUR/USD at 1.1000. Instead of that, your trade is filled at 1.1004. That’s 4 pips of slippage. Depending on your lot size, that could be the difference between a good day and a frustrated rant on Reddit.
Slippage is especially common during periods of high volatility or when large orders are placed in thinly traded markets. But here’s the twist: it’s not always bad — sometimes slippage works in your favor (yes, unicorns do exist).
Why Does Slippage Happen?
There are a few key reasons slippage occurs, and most of them have to do with market dynamics:
| Cause of Slippage | Explanation |
|---|---|
| Volatility | Sharp price movements make it hard to match orders at expected prices |
| Low Liquidity | Fewer participants in the market = fewer matching prices |
| Execution Speed | A delay in order processing can result in missed prices |
| News Releases | Spikes or crashes during news events often lead to wild slippage |
| Order Type | Market orders are more prone to slippage than limit orders |
The foreign exchange market moves fast. You blink, and the price is already somewhere else. By the time your order hits the server and is matched, the bid/ask spread might have moved. It’s like trying to hit a dartboard while it’s being dragged across a football field.
Types of Slippage: Positive vs Negative
Let’s not be all doom and gloom — slippage isn’t always a villain. It has a nice side too.
| Type of Slippage | What It Means |
|---|---|
| Negative Slippage | You get a worse price than expected — and probably some rage. |
| Positive Slippage | You get a better price than expected — cue victory dance. |
Example:
Expected price: 1.2000
Executed price: 1.2003 → Negative slippage
Executed price: 1.1997 → Positive slippage
Unfortunately, most traders tend to remember only the negative ones. Kind of like how nobody remembers the time their pizza arrived early.
How Forex Brokers Handle Slippage?
This is where things get interesting — and occasionally shady.
Forex brokers aren’t all created equal when it comes to execution. Some handle slippage better than others, and some… well, let’s just say you’ll need a microscope to find any transparency.
There are two main types of execution models:
Broker Type Slippage Handling Notes Market Makers Can re-quote or reject orders Slippage less common, but re-quotes possible ECN/STP Brokers Orders matched directly with liquidity providers More slippage likely, but faster and more transparent If you’re trading with a market maker, they might offer fixed spreads and less slippage, but there could be re-quotes — a polite way of saying, “Try again, dear trader.”
On the other hand, ECN/STP brokers will fill your order at the best available price — even if it’s not the one you clicked on. That means more transparency, but also more raw exposure to slippage.
A solid, regulated forex broker will usually disclose how slippage is handled in its trading agreement or FAQs. (Pro tip: always read the fine print — or at least skim it while sipping coffee.)
Slippage During Volatile Market Conditions
Slippage tends to rear its ugly head during the following situations:
Major economic news (Non-Farm Payrolls, FOMC decisions, interest rate announcements)
Unexpected geopolitical events (wars, elections, Twitter fights between billionaires)
Opening of major trading sessions (especially the London and New York overlap)
Weekend gaps (when markets reopen on Sunday night/Monday morning)
Here’s a basic rule of thumb: the faster the market moves, the less likely you are to get the price you clicked.
| Scenario | Slippage Risk |
|---|---|
| Quiet Asian session | Low |
| Post-news spike | High |
| Weekend open | Very High |
| Trading at 3 AM half-asleep | Guaranteed 😅 |
If you’re scalping or day trading during high-impact news, slippage isn’t just likely — it’s inevitable. That’s why risk control is your best friend.
Strategies to Avoid or Reduce Slippage
You can’t eliminate slippage completely (unless you’ve invented a time machine), but you can reduce its impact.
Here are some practical ways:
✔ Use Limit Orders Instead of Market Orders
Limit orders execute at your specified price or better — not worse. You might miss a trade, but at least you won’t get a shocker.
✔ Avoid Trading During News Releases
Unless you thrive on adrenaline, avoid trading seconds before or after major economic data drops.
✔ Choose a Broker with Fast Execution
Look for forex brokers that are known for lightning-fast order execution. Ideally, execution times should be under 100 milliseconds.
✔ Check Slippage Statistics
Reputable brokers sometimes publish average slippage stats. It’s a green flag if they’re open about execution quality.
✔ Reduce Position Sizes During High Volatility
Big orders are harder to fill — especially in fast markets. Trade smaller sizes when markets are jumpy.
✔ Use a VPS for Automated Trading
If you’re running EAs or algorithmic systems, a Virtual Private Server (VPS) near your broker’s data center can reduce latency and improve order fills.
Choosing a Forex Broker That Minimizes Slippage
Here’s a quick checklist when evaluating forex brokers to minimize slippage:
| Feature | Why It Matters |
|---|---|
| Tight spreads | Smaller gap between bid/ask = lower slippage potential |
| Fast execution | The quicker the order is filled, the lower the chance of slippage |
| No dealing desk (NDD) | Helps reduce manipulation, adds transparency |
| Slippage protection tools | Some brokers offer plugins or features to cap slippage |
| Regulation and reviews | A trusted broker is less likely to play games with execution |
Some brokers even allow maximum deviation settings — which means you can choose how much slippage you’re willing to tolerate before your order is canceled. Kind of like telling the market, “You’ve got 2 pips to get this right, or we’re done.”
Accept It, Control It, Don’t Let It Ruin Your Trades
Slippage is part of the forex game. It’s frustrating, sure — but it’s also manageable. It’s not some evil conspiracy hatched by forex brokers (well, not always). Most of the time, it’s a natural result of a fast, decentralized, highly liquid market.
Just remember:
Slippage can be both negative and positive
The type of order and broker you use matters
Volatility is slippage’s best friend — trade smart during news
Protect yourself with limit orders and better execution environments
If you plan your trades, choose the right broker, and respect market conditions, slippage won’t break your trading journey. Instead, it’ll just be one of those quirks you learn to deal with — like spread widening or MetaTrader crashing during an important trade (don’t get us started).
Frequently Asked Questions (FAQs)About Slippage
| Question | Answer |
|---|---|
| Is slippage always bad? | No. Positive slippage gives you a better price. |
| Can I prevent slippage completely? | Not completely, but you can reduce it with smart order types and timing. |
| Do all forex brokers have slippage? | Yes — but how they handle it varies greatly. |
| Which broker is best for low slippage? | Look for ECN/STP brokers with good execution stats and tight spreads. |
| Is slippage worse during certain hours? | Yes. Especially during news events or Sunday market opens. |
| Are fixed spread brokers immune to slippage? | No, they may re-quote instead, which is another form of execution risk. |