What Is Slippage in Trading?

When you send a market order, your terminal requests execution at the current displayed price. By the time that request reaches the server and is matched against available liquidity, the market may have moved — if it moved against you, that is negative slippage; if it moved in your favour, that is positive slippage, which does happen and is reported far less often than the negative kind.

In calm, liquid conditions this gap is typically negligible because price moves slowly relative to execution speed. In fast conditions, price can move multiple points in the time it takes an order to process, and the fill reflects wherever price actually was when the order reached the market, not where it was when you clicked.

A market order prioritises certainty of execution over certainty of price — it will fill, but potentially at a different level than requested, which is where slippage comes from. A limit order does the opposite: it specifies the worst price you will accept and will only fill at that price or better, meaning it cannot experience negative slippage, but it also may not fill at all if price moves through the level too quickly.

Stop orders, including a stop loss, behave like a market order once triggered — they guarantee the position will close, not the exact price it closes at. This is the same reason a stop loss can be affected by a gap, covered in more detail in the guide on setting stops in MT5.

Scheduled high-impact releases — interest rate decisions, employment data, inflation prints — are when slippage risk rises sharply. Liquidity can thin out in the seconds before a release as market makers widen spreads or pull quotes, and then a large volume of orders hits the market simultaneously once the number is published, causing price to jump between levels rather than move through them smoothly.

A market order sent seconds before or during such a release can fill meaningfully away from the displayed price, in either direction. Traders who want to avoid this exposure generally step aside from the market in the minutes immediately surrounding a known high-impact release rather than trading through it.

On an account with a fixed daily drawdown limit, a stop loss that fills a few points beyond its set level due to slippage is normally immaterial — it is a small addition to a loss that was already sized within your risk plan. It becomes a real concern only when a position is sized right at the edge of the daily limit, because in that case even minor slippage on the stop can be the difference between a loss that stays inside the limit and one that breaches it.

The practical response is to leave a margin of safety rather than sizing trades to use the entire daily allowance on a single position. Building slippage tolerance into your sizing — treating your risk-per-trade figure as a target rather than an exact ceiling — keeps a normal, small slippage event from becoming a rule breach.