Is this what you call slippage

Beginner Questions
1

Hi

Just got stopped out GBP/USD price moved 60 pips in a flash, was looking at 20 pips for the good moved my stop loss to lock in some profit then bang I am down 20 pips.

How usual is this, and is there anything I can do to protect myself from it?

Regards

Daren

2

Wear a box and helmet Bro. Yes this is slippage. That’s the game we play. So dangerous having a trade open at news time with stops less than 100 pips. Even then that’s no safety net.

3

Thanks Bob have only just moved recently to real trading was impressive to see the price move so fast the losses where insignificant as still learning and only trading a couple of micro lots. Will remember that for next time.

Now where’s my helmet and box…

Daren

4

Hi Darren,

You have slippage if your pending order levels, as entry, Sl or Tp, are negated by your broker. For instance, you have a sl of 20 pips but because of fast move down, by news mostly, you are stopped out at 30 pips.
This although you have set you sl at 20.
It is caused by a illiquidity during news moments and your broker will stop you out at next level down were there is liquidity.

5

Slippage and widened spreads happen every-time the market goes crazy, generally after the release of an important fundamental. Most of them are on the forex calendar, but not all of them.

For example a big corporation buyout will not appear on the calendar but may create a big price move. Speeches from important economist and national banks are on the calendar, but the price can move widely up and down as the speech goes on, the price reacting at each new information given during the speech, sometimes hours after the time noted down on the calendar if the speech is long.

A spread indicator can be useful depending on your trading style.

6

There are always some ways to protect your self from those big movements, it all depends of your own trading strategy and your way how you approach to the forex trading. By the time you will learn from your mistakes and not repeat them again.

7

Beware: slippage!


8

Slippage can cause great loss but due to technical reason there will always be slippage between the the requested price and execution price. Some times the fault can always come from your broker. You need to look for brokers with advanced technology system and ECN like what profiforex has. Whereby all your orders goes straight to the market.