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How is slippage generated?

1. What is Slippage? (Simple Explanation) Slippage refers to the difference between the intended order price and the actua...

Written by Jerome

1. What is Slippage? (Simple Explanation)

Slippage refers to the difference between the intended order price and the actual execution price.

📌 It is not manipulation but a result of market volatility + execution mechanics.


2. How does slippage occur? Three main cases:

1️⃣ High market volatility

During news releases or market open, prices move faster than order placement:

  • At order: 1920.00

  • At execution: 1920.85

💥 Result → Positive/Negative slippage

2️⃣ Low liquidity

Few buy/sell orders available →

  • Order executes at the next available price

  • Common in exotic pairs or off-hours

3️⃣ Market order execution

Choosing a Market Order means:

  • “I prefer speed over price”

  • System fills at the best available price

If price jumps, execution occurs at the new price → slippage


3. Is slippage always bad?

  • ✅ Positive slippage: Filled better than expected

  • ❌ Negative slippage: Filled worse than expected

📌 Conclusion: Slippage is neutral, depending on market conditions, not broker manipulation.


4. AFT Platform Slippage Handling (Example)

  • All orders executed with real market liquidity

  • Market orders filled at the best available price

  • If “maximum deviation” is set, system limits slippage (Beyond range → requote or rejection)

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