Slippage

### What it actually is Slippage is the distance between the price you asked for and the price you got. A market order buys you a guaranteed fill, not a guaranteed price. Your order takes time to travel, and in that time the best available price can move or simply vanish. If your size is larger than what is resting at the best price, you get filled progressively worse as the order eats down through the book. [OANDA's trading education](https://www.oanda.com/us-en/trade-tap-blog/trading-knowledge/slippage-execution-risk-in-trading/) splits the causes into three: volatility, liquidity gaps, and latency. That split is worth keeping, because two of the three are choices. You choose when to click. You choose whether you are sitting in a market order during a scheduled event. It can occasionally land in your favour. Treat that as a rounding gift, not a plan. ### It hits hardest exactly where you least want it It is easy to think of slippage as an entry problem. It is worse than that. Your **stop loss** is the order most exposed to it. The SEC's [investor bulletin on stop orders](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-15) says it plainly: the stop price is not the guaranteed execution price, it is a trigger that turns the order into a market order. It then fills at whatever is actually there. [FINRA's guidance on stop orders in volatile markets](https://www.finra.org/investors/insights/stop-orders-factors-consider-during-volatile-markets) says the same thing, warning that your stop order may be executed at a price significantly different from your stop price. Read that back in terms of risk. "I am risking one percent on this trade" is a plan, not a promise. In a fast market the loss you book can exceed the loss you sized for, and no amount of discipline in your entry rules changes that arithmetic. ### Most of it is a diary entry, not bad luck The worst slippage clusters around events you could have seen coming. The Federal Reserve stamps its FOMC statements with a fixed release time, 2:00 p.m. Eastern, printed on the release itself, and the major jobs and inflation prints have published calendar slots of their own. Session opens and the Sunday reopen after the weekend are the other reliable danger windows. So it is not fate. If your model demands a market order at the precise second liquidity is thinnest, that was a decision. Platforms give you one lever: MT4 and MT5 expose a *maximum deviation* setting, and OANDA offers upper and lower bounds, which cancel the order rather than fill it outside your tolerance. That protects an entry. It cannot protect a stop, because a triggered stop becomes a market order by design. ### The mistake that costs the most Building a strategy on clean chart prices. A backtest with no spread, no commission, and no slippage in it is a fantasy. Add all three back and a thin edge can disappear completely, because the whole edge was sitting inside the execution cost the entire time. If a setup only works when you get a perfect fill, you do not have an edge. You have a rounding error. Any risk-to-reward you calculate should be calculated on the fill you will realistically get, not the one the chart promises.