Hi all
I want to ask how can I find out what is my slippage? What is considered a good level?
If you use an EA its relatively easy as you record the price you observe in the market when the order is send on the wire and the slippage is the difference between the executed price and the observed price.
If you are trading by hand its harder to do. Limit orders don’t have slippage, market order do but you can’t record the price when they went to market unless you use an EA to do some house keeping for you. The easiest way is to use your stop entry orders. These incur slippage and have an effective execution price associated with them. The difference is your slippage.
A good value is <.5 pips in the majors. I have heard stories on there of people getting 10 pips while trading news etc. Slippage occurs for 2 reasons market moves and spread blowouts. I would say recording the bid ask and doing the analysis properly is important to know if the slippage is because of the former or the latter.
What???
Slippage occurs when liquidity issues arise. This can happen anytime so unless you are Citi bank you just accept it is part of the game.
wait till the next ECB or FOMC meeting and watch your spreads for a minutes before and after the announcements. Maybe a max of 10pips on the majors, 50 on crosses and 100 on exotics; on the extreme side
Ha Ha. Good one mate. Indeed Slippage is a part of the game. But need to be careful from the scam brokers who play with the slippage.
Jesse Livermore paints a good picture of bucket shop brokers. Not much has changed since the 1900’s…