Slippage: Why Your Stop Filled Past the Level
Macro Glossary, Forex Mechanics
By Ken Chigbo, macro trader and founder of KenMacro, 18+ years in markets.
Updated 2026-05-20
The desk’s answer
Slippage is the gap between the price at which an order is submitted and the price at which it is filled. Negative slippage means the fill is worse than requested, positive means it is better. It occurs because the market moves between the moment the order arrives at the broker and the moment it executes against available liquidity. Slippage is largest in fast or thin markets, especially around economic releases and at session opens. On a stop-loss order, negative slippage means the loss is larger than the planned 1-R figure, which over many trades is a meaningful drag on the expectancy of any strategy.
Defined term, Slippage
Slippage is the difference between the price at which a market or stop order is submitted and the price at which it is actually filled, expressed in pips. Negative slippage means the fill is worse than requested, positive slippage means it is better. Slippage is mechanical in fast or thin markets and is a primary execution cost beyond the quoted spread.
What causes slippage
Three forces. First, latency: the round-trip time between order submission and execution allows the price to move. Standard internet latency from a London desk to a London-hosted broker is 5 to 30 milliseconds, during which a fast tape can move 1 to 5 pips. Second, liquidity: when the order size is larger than the visible best bid or offer, the fill walks up or down the book, with each successive partial fill at a worse price. Third, gap events: data releases, central-bank announcements and weekend opens can cause instantaneous gaps where the next tradeable price is several pips beyond the quoted level, and a stop placed inside the gap fills at the first available print.
How slippage interacts with stop-loss orders
A stop-loss order becomes a market order once the stop level is touched. The market order then fills at whatever liquidity is available, which in a fast tape is below the requested stop level. A 50-pip stop placed before NFP that fills with 8 pips of slippage realises a 58-pip loss, 16 percent above plan. Across a year of trades that average 3 pips of slippage per stop on a 40-pip stop strategy, the realised loss is 7.5 percent above the planned 1-R, which can shift a profitable strategy into break-even. Guaranteed Stop Loss Orders (GSLO), offered by some brokers for a premium, eliminate slippage by guaranteeing the requested fill price; the cost is a wider premium charged on every position.
Managing slippage in practice
Three controls. First, avoid placing market orders or letting stops trigger during the first 30 seconds of a high-impact release; spreads and slippage are widest then. Second, set realistic expectations: a 1 to 3 pip slippage envelope on routine fills, with 5 to 20 pips around major news, is normal at a competent broker. Persistent slippage outside that range suggests the broker is running a poor LP relationship or B-booking aggressively. Third, log fills versus requested prices over a real trading week and compute the slippage distribution. A broker whose median slippage is positive or zero, with a tight negative tail, is the genuine article; the marketing pip is not.
Frequently asked
What is slippage in forex?
Slippage is the difference between the price at which an order is submitted and the price at which it is filled, expressed in pips. Negative slippage means a worse fill than requested, positive slippage means a better fill. It is a primary execution cost beyond the quoted spread.
Why does slippage happen?
Three reasons: round-trip latency between order submission and execution allowing the price to move, liquidity at the requested level being smaller than the order size, and gap events where the next tradeable price is several pips beyond the requested level. All three are largest in fast or thin markets.
How can I reduce slippage on stops?
Avoid letting stops trigger during the first 30 seconds of high-impact releases, place stops outside the typical noise band of the pair rather than at obvious levels that attract a sweep, log realised versus requested fills to identify a broker with a poor LP relationship, and use Guaranteed Stop Loss Orders (at the cost of a premium) when slippage risk is highest.
What this means at the desk
Slippage is real and asymmetric on stops. Log it, expect 1 to 3 pips on routine and a wider tail on news.
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