A question about slippage and what can be expected

Trading Discussion
1

Hi,

I placed a trade on GBPJPY this morning which was nicely in profit just prior to the GBP retail sales announcement at 09:30 BST. I entered long at 158.95 and price was at 159.28 just before the announcement. I moved my stop to 159.16 to be on the safe side, but in that 1 minute of volatility at 09:30 my trade didn’t actually close until 158.93… costing me 23 pips.

I will not name the broker I am using, but suffice it to say they are considered one of the more reputable ones.

What I would like to know is if that is to be expected at times of high volatility. I spoke to my broker about it and I was told that 23 pips is not unusual. If that is true it could have a serious impact on the method I’m using.

Any advice or similar experiences to tell of would be much appreciated.

2

Holding a trade over gap sessions (weekends) and during high impact news events and/or announcements can lead to greatly increased slippage so yes, it is not all that unusual. The shorter the trading window you use the more wary you should be of trading during these times. During “normal” markets slippage isn’t too much of an issue.

3

Yep, this isn’t unusual for big news trades. Would it be too much of an adjustment for your strategy if you wait a couple of seconds more? It usually doesn’t take minutes for the ridiculous spreads to go back to its “normal” rates.

4

This is a usual situation. It happens all the time. Even I, sometimes, I can’t manually close trade when the market is most volatile and I end up losing. However, what I do is that, I don’t close the trade during fast movement, I just allow it to go to whatever length it wants because I know it will surely bounce back. So, my friend, it is not the doing of the broker. But I must warn you that if you are using these big brokers, these are some of their tricks to make traders lose. So, when you say a reputable broker, I don’t know which broker you are referring to. Most regulated brokers do these tricks a lot because of the trust that has been placed upon them all in the name of regulation. Beware of them.