What Is Slippage and How to Minimize It
Slippage is the difference between your expected execution price and your actual fill. For active traders, it's a real cost that compounds over time.
Basics · March 30, 2026 · 4 min read
Slippage occurs when your trade fills at a different price than you intended. If you place a market buy order for EUR/USD at 1.1050 and fill at 1.1053, you experienced 3 pips of slippage. It happens because between when you click buy and when the order reaches the exchange, the best available price may have changed — especially in fast-moving markets or around news events.
When Slippage Is Worst
Slippage is highest during: major news events (spreads widen dramatically and order flow surges), market open (the first seconds of trading when liquidity is thin), low-liquidity sessions (Asian session for non-Asian pairs), and when trading illiquid instruments (small-cap stocks, exotic forex pairs). For stop loss orders triggered in fast markets, slippage can be substantial — your stop at 1.1020 may fill at 1.1015 or worse.
Minimizing Slippage
Use limit orders instead of market orders where possible — they guarantee your price or better, though they may not fill. Trade during peak liquidity hours. Choose highly liquid instruments (major forex pairs, S&P 500 components) that have deep order books. Avoid entering or exiting positions immediately before or during scheduled news events. Understand that slippage is a cost of doing business and factor it into your strategy's expected performance.
What Is a Pip in Forex Trading?