Slippage explained

When the fill doesn't match the click

Slippage is the difference between the price you saw on screen when you clicked and the price your order actually filled at. It happens because markets move in milliseconds. By the time your click travels to the broker's server and is matched against available liquidity, the price has already changed a little — sometimes a lot.

A quick example. You see EUR/USD at 1.0850 and click buy. By the time your order is processed 200 milliseconds later, the bid-ask has moved to 1.0852 / 1.0853. You get filled at 1.0853. You just paid 3 pips more than the price you clicked. That's 3 pips of negative slippage. The same thing can happen in your favor — the price could have dropped, and you'd get a better fill. But on aggressive market orders, negative slippage is more common than positive, because spreads widen during fast moves.

Stops are where slippage hurts most. When the price hits your stop loss, the stop converts to a market order, which means it fills at whatever the next available price is. In a normal market, that's typically just a fraction of a pip past your stop. In a fast market — like during a news spike or a flash crash — the price can gap past your stop entirely, and you'll be filled wherever liquidity returns. A stop at 1.0830 in a normal session might fill at 1.0829. A stop at 1.0830 during a news event might fill at 1.0795.

Two things you can do. First, use limit orders instead of market orders when entering: a limit order only fills at your specified price or better, so you can't get a worse price (but it may not fill at all). Second, size your trades for the worst-case slippage. A 1% account risk calculation that assumes your stop fills exactly where you placed it can quietly turn into 1.5% or 2% when slippage shows up.

Recap: slippage is the gap between clicked price and filled price. It widens at news, opens, and gaps. Stops feel it most. Limits avoid it but can miss the trade.