What is slippage?
Slippage is the difference between the price you asked for and the price your order actually filled at. If you click buy on gold at $3,340.00 and the trade executes at $3,340.40, you have taken 40 cents of slippage.
It is not a fee and it is not a broker error. It is what happens when the market moves, or when the available volume at your price runs out, in the fraction of a second between your click and the execution.
What causes slippage?
Three things, and they usually arrive together.
Price is a moving target. During a news release the quoted price can change several times per second, so the price on your screen is already historical by the time your order reaches the server.
Every price has a limited amount of volume sitting behind it. If you send an order larger than the volume available at the best price, the remainder fills at the next price levels. This is why a 5 lot order can slip when a 0.05 lot order does not.
Markets close and reopen. If gold closes Friday at $3,340 and opens Monday at $3,368, every order resting in between fills at the new price, not the old one. Stop losses are the most common casualty here.
Latency matters too, but for most retail traders it is the smallest of the four factors, well behind volatility and order size.
How much does slippage actually cost?
More than most traders assume, because the cost is per trade and it compounds across a year.
One standard lot of gold is 100 ounces, so every $1.00 of price movement is $100 per lot. That makes the arithmetic straightforward:
| Position size | $0.10 of slippage | $0.30 of slippage | $1.00 of slippage |
|---|---|---|---|
| 0.10 lot (10 oz) | $1 | $3 | $10 |
| 0.50 lot (50 oz) | $5 | $15 | $50 |
| 1.00 lot (100 oz) | $10 | $30 | $100 |
Now scale it. A trader running 0.50 lots who takes an average of $0.30 slippage on entry and exit combined is paying $15 per round turn. At 40 trades a month that is $600 a month, or $7,200 a year. On a $30,000 account, slippage alone is a 24 percent annual headwind before the strategy has proved anything.
That number is why execution quality is not a technical footnote. A strategy showing a 30 percent gross return can be an outright loser once realistic slippage and the spread are applied to it.
Is slippage always against you?
No. Positive slippage exists and it is more common than most retail traders believe.
If the market ticks in your favour between click and fill, you get a better price than you asked for. A buy at a requested $3,340.00 that fills at $3,339.70 has given you 30 cents of positive slippage. Reputable brokers pass this through rather than pocketing it, and the honest test of a broker is whether your fills are roughly symmetrical over hundreds of trades or consistently worse in one direction.
Consistent one-way slippage is the warning sign. Random slippage in both directions is normal market behaviour.
Which order types control slippage?
Limit orders control it. Market orders do not. That single distinction covers most of what a trader needs.
| Order type | Guarantees price | Guarantees execution | Slippage exposure |
|---|---|---|---|
| Market order | No | Yes | Full |
| Limit order | Yes | No | None, but may not fill |
| Stop (stop-market) | No | Yes once triggered | Full, worst during gaps |
| Stop-limit | Yes | No | None, but can leave a losing position open |
The trade-off is real and there is no free option. A limit order protects your price and may leave you out of the move entirely. A stop-limit protects your exit price and can leave you holding a losing position that runs straight through your limit, which is the exact scenario a stop loss is meant to prevent. For most traders, an ordinary stop-market order that fills at a slightly worse price is safer than a stop-limit that does not fill at all.
How does slippage change your risk numbers?
It widens every stop you have planned, so plan for it in advance.
Suppose you size a position on a $20 gold stop and risk 2 percent of a $10,000 account, which is $200. At $10 per pip per lot on a 200 pip stop, that gives you roughly 0.10 lots. If your stop fills 40 cents worse than the level, your actual loss is $20.40 per ounce equivalent rather than $20.00, which is 2 percent more than budgeted. On a single trade that is trivial. Across a losing streak of eight trades it is the difference between a 16 percent drawdown and a 16.3 percent one, and across a year of frequent trading it becomes a real drag.
The practical fix is to assume your average slippage as part of the stop distance when you size the position, rather than treating it as a surprise afterwards. Our guides on what a stop loss is and how pips and lots work cover the sizing mechanics this sits on top of.
How does TIC treat slippage?
As part of the real result, not as an excuse.
The reason we publish independently verified Myfxbook results is precisely that verified data reflects actual fills, including every cent of slippage, spread and swap the account paid. A backtest does not. A screenshot does not. A verified track record read directly from the broker does, which is why it is the only performance evidence worth arguing about. You can review ours at /results.
Practically, the habits that reduce slippage are unglamorous: avoid market orders in the first seconds after a major data release, size positions to the liquidity actually available, and treat weekend gap risk as a real exposure rather than a rare event.
trading carries high risk and you may lose your capital; past performance does not guarantee future results; educational only, not investment advice.
Verify any trader's results in 10 minutes
Seven checks that reveal whether a track record is real: third-party verification, maximum drawdown, trade count, and the martingale warning signs. Use it on anyone — including on us.
We'll send the checklist plus occasional TIC insights. We never share your email, and you can unsubscribe any time.
