Slippage

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Slippage is common in the forex markets and the stock markets alike, particularly when prices are moving quickly. One of the downsides of slippage is that if a price moves by the time your trade is placed into the market, your execution price could be slightly worse.

What is Slippage? 

Slippage, also known as market gapping, often occurs during periods of higher volatility (maybe due to news events).  Also, when large orders are executed there may not be enough interest at the desired price level to maintain the expected price of trade meaning the market slips to a price where these orders are matched.

Slippage happens when a limit order (An order placed with your broker to buy or sell into a market at a specified price in the future) deals at a worse rate than originally set in the order. In this situation, most dealers will execute the trade at the next best price. Market orders (An order placed for immediate execution) placed by the trader may get executed at a worse than expected price too if you're not careful. Traders can help to protect themselves from slippage by avoiding limit orders when not necessary. 

Slippage can also occur while you're holding a position, where the current period's opening price jumps away from last period's closing price. This can mean your stop order may not be executed at your original order price if slippage causes the price to gap past it. Your broker will likely place your stop order at the best available price after slippage.  So, just be aware that company profit warnings can really make a dent in your profits and increase your losses and always have a handle on up and coming economic events, as these events may have an affect on your position. 






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Slippage is common in the forex markets and the stock markets alike, particularly when prices are moving quickly. One of the downsides of slippage is that if a price moves by the time your trade is placed into the market, your execution price could be slightly worse.

What is Slippage? 

Slippage, also known as market gapping, often occurs during periods of higher volatility (maybe due to news events).  Also, when large orders are executed there may not be enough interest at the desired price level to maintain the expected price of trade meaning the market slips to a price where these orders are matched.

Slippage happens when a limit order (An order placed with your broker to buy or sell into a market at a specified price in the future) deals at a worse rate than originally set in the order. In this situation, most dealers will execute the trade at the next best price. Market orders (An order placed for immediate execution) placed by the trader may get executed at a worse than expected price too if you're not careful. Traders can help to protect themselves from slippage by avoiding limit orders when not necessary. 

Slippage can also occur while you're holding a position, where the current period's opening price jumps away from last period's closing price. This can mean your stop order may not be executed at your original order price if slippage causes the price to gap past it. Your broker will likely place your stop order at the best available price after slippage.  So, just be aware that company profit warnings can really make a dent in your profits and increase your losses and always have a handle on up and coming economic events, as these events may have an affect on your position. 






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