Educational content. This article defines what slippage is and how it works across CFD instruments. It does not constitute investment advice or a trading recommendation. CFD trading carries significant risk of loss and may not be suitable for all investors.
Slippage is the difference between the price a trader expects when placing an order and the price at which it actually executes. It happens when the market moves between order placement and fill, and can be positive (a better price than expected) or negative (a worse price than expected). It is a normal feature of live markets rather than a malfunction.
This article defines slippage, separates positive from negative slippage, explains the drivers, and shows how slippage behaves on VantoTrade's MT5 platform with concrete reference to spreads, liquidity, and order types.
What Is Slippage in Trading?
Slippage is the difference between the price a trader expects when placing an order and the price at which it actually executes. Between the moment an order is sent and the moment a counterparty fills it, the market can move, so the fill price may land above or below the quote that was on screen. Slippage is measured in pips or points, the same units used to quote every price move.
Slippage can be positive or negative. Positive slippage means the order filled at a better price than requested; negative slippage means it filled at a worse price.
Positive vs Negative Slippage Explained
Positive slippage is a fill at a better price than expected, while negative slippage is a fill at a worse price than expected. The direction depends on which way the market moved in the fraction of a second between order placement and execution.
A worked example makes the distinction concrete. Suppose a trader sends a market buy order on EUR/USD with the quote showing 1.16550:
| Scenario | Requested price | Fill price | Outcome |
|---|---|---|---|
| Negative slippage | 1.16550 | 1.16554 | Filled 0.4 pips worse |
| No slippage | 1.16550 | 1.16550 | Filled at the quote |
| Positive slippage | 1.16550 | 1.16546 | Filled 0.4 pips better |
Both directions occur in practice. In fast markets, the price can move in the trader's favour just as easily as against it, which is why slippage is symmetrical in principle even though traders tend to notice the negative cases more.
Why Does Slippage Happen?
Slippage happens when the price available in the market changes between the moment an order is placed and the moment it is filled. There is always a small delay while the order travels to the venue and a counterparty is matched, and in that window the order book can shift.
Slippage occurs most often when:
- Markets move fast, so prices change within milliseconds of order placement.
- Liquidity is thin, so there are too few resting orders at the quoted price to fill the full size.
- Major news hits, releasing a burst of orders that moves the price sharply.
These three conditions often overlap, which is why the largest slippage tends to cluster around scheduled high-impact events.
How Volatility and Low Liquidity Drive Slippage
Volatility and low liquidity are the two structural conditions that widen slippage. When volatility is high, the price is moving quickly, so the quote a trader saw can be stale by the time the order reaches the market. When liquidity is thin, the order book holds fewer resting orders at each price level, so a market order has to "walk" up or down the book to find enough volume to fill.
Liquidity is not constant through the day. It concentrates when major financial centres are active and thins out between sessions. The analysis of liquidity across gold trading sessions shows how execution conditions on a single instrument can differ depending on which markets are open. Lower liquidity generally coincides with wider spreads and a higher chance of slippage on larger orders.
Slippage Around News Events and Session Gaps
Slippage is most pronounced around scheduled news events and at session gaps, because both inject a sudden imbalance between buyers and sellers. High-impact releases such as US CPI, FOMC rate decisions, and Non-Farm Payrolls can move price by many pips in a single tick, so an order placed seconds before or during the release may fill far from the pre-release quote. The breakdown of how US CPI day moves gold and silver illustrates how concentrated this volatility can be on metals.
Session gaps are the other common trigger. Markets close over the weekend and at certain daily breaks, and the price at which they reopen can differ from the price at which they closed. An order resting across the gap, including a stop-loss or take-profit, fills at the first available price after the open, which may be some distance from the level it was set at.
Slippage vs Spread: What's the Difference?
Slippage and spread are distinct trading costs. The spread is the visible, pre-trade gap between the bid and ask price that a trader effectively pays on every position. Slippage is an unpredictable, post-execution difference between the expected and actual fill price, and it does not occur on every trade.
| Feature | Spread | Slippage |
|---|---|---|
| When it appears | Before the trade, on screen | At execution |
| Predictability | Known in advance | Unpredictable |
| Frequency | Every trade | Only some trades |
| Direction | Always a cost | Can be positive or negative |
The two are related because both widen in the same conditions: thin liquidity and high volatility push spreads wider and increase the chance of slippage at the same time. The definition of the spread in trading covers the bid-ask cost in full.
Market Orders vs Limit Orders and Slippage
Market orders and limit orders handle slippage differently because they prioritise different things. A market order prioritises speed of execution and accepts the next available price, which means it can slip in either direction. A limit order sets the worst acceptable price and will not fill beyond that boundary, which caps negative slippage but introduces the possibility that the order never fills if the market does not reach the limit.
The mechanical trade-off is between certainty of execution and certainty of price. A market order trades price certainty for fill certainty; a limit order trades fill certainty for price certainty. Neither removes risk; they allocate it differently. This article describes how each order type behaves and does not recommend one over another, because the appropriate choice depends entirely on a trader's own objectives and circumstances.
How Slippage Relates to Liquidity and Execution Type
Slippage scales with how much liquidity sits behind the quoted price and with the execution model the broker uses. A quote represents the best available price for a limited volume. If an order is larger than the volume resting at that price, the remainder fills at the next price levels, producing slippage even without any news event. Smaller orders in deep markets are more likely to fill at or near the quote.
Execution type also matters. Under market execution, the platform forwards the order to be filled at the prevailing market price rather than guaranteeing the on-screen quote. This is the standard model for CFD instruments and is the reason slippage is an expected feature rather than an error. For the broader mechanics of trading these instruments, the guide to how to trade indices sets out execution and cost concepts across the catalogue.
How Much Slippage Is Normal?
Slippage of roughly 1 to 5 pips on major forex pairs is common in normal market conditions, with smaller figures during deep-liquidity hours and larger figures around news or at session gaps. There is no fixed "normal" number because it depends on the instrument, the order size, the time of day, and current volatility.
In calm, liquid conditions many orders fill with little or no slippage. During high-impact releases or at thin times of day, slippage can be substantially larger and can affect any pending order, including stops. The figure is a guide to typical behaviour, not a guaranteed range.
How Slippage Works on VantoTrade (MT5 Market Execution)
VantoTrade runs on MetaTrader 5 with market execution, so orders are filled at the prevailing market price rather than a guaranteed quote, and slippage is part of normal execution. MT5 provides a "maximum deviation" setting on market orders that caps the price band the order will accept. If the available fill price falls outside that band, the order is rejected rather than filled at a worse price, which gives the trader control over how much negative slippage to tolerate at the cost of a possible non-fill.
Two mechanics are worth stating plainly. First, maximum deviation limits the accepted band in both directions, so it does not block positive slippage when the market moves favourably. Second, stop-loss and take-profit orders execute at the first available price once their trigger level is reached, so in fast or illiquid conditions, or across a weekend gap, they can fill some distance from the set level. This is a structural feature of how pending orders work in live markets and applies to every CFD broker using market execution. To see live spreads and contract specifications on every VantoTrade symbol, open the trading calculator.
Frequently Asked Questions About Slippage
Is slippage good or bad?
Slippage is neither inherently good nor bad; it is a neutral feature of live execution. Negative slippage produces a worse fill than expected, while positive slippage produces a better one. Because the price can move either way in the moment between order placement and fill, both outcomes occur over time.
How much slippage is normal in forex?
Slippage of about 1 to 5 pips on major forex pairs is common in normal conditions, with less during deep-liquidity hours and more around news events or at session gaps. There is no fixed normal figure, since it depends on the instrument, order size, time of day, and volatility.
What is the difference between slippage and spread?
The spread is the visible bid-ask gap paid on every trade before execution, while slippage is the unpredictable difference between expected and actual fill price that occurs at execution and does not happen on every trade. Both widen in thin or volatile conditions.
Do limit orders prevent slippage?
A limit order caps the worst acceptable price, so it prevents a fill beyond that boundary; in exchange, the order may not fill at all if the market never reaches the limit price. A market order, by contrast, accepts the next available price and can therefore slip.
What causes positive slippage?
Positive slippage occurs when the market moves in the trader's favour in the instant between order placement and execution, so the order fills at a better price than requested. It is most likely in fast-moving markets, the same conditions that also produce negative slippage.
Why does slippage happen during news events?
News events such as CPI, FOMC, and Non-Farm Payrolls release a sudden burst of orders that can move the price many pips in a single tick. An order placed near the release may fill far from the pre-release quote because the price has already moved by the time the order reaches the market.
Can you avoid slippage completely?
Slippage cannot be eliminated under market execution, because there is always a delay between order placement and fill during which the price can change. Limit orders cap negative slippage at a chosen price but carry the risk of not filling, so the exposure is allocated rather than removed.
Does slippage affect stop-loss orders?
A stop-loss executes at the first available price once its trigger level is reached, so it can slip in fast or illiquid conditions or across a session gap. This means the realised exit price may differ from the stop level that was set, particularly during high-volatility events or at the weekend reopen.
Key Takeaways
- Slippage is the difference between the expected price and the actual execution price; it can be positive or negative.
- It is driven by fast-moving markets, thin liquidity, and major news such as CPI, FOMC, and NFP, plus weekend and session-open gaps.
- Spread is a visible cost on every trade; slippage is an unpredictable cost that occurs only on some trades.
- Market orders accept the next available price and can slip; limit orders cap the worst acceptable price but may not fill.
- On VantoTrade's MT5 market execution, maximum deviation caps the accepted price band, but stops and take-profits can still slip through gaps.
Apply These Concepts in Your Trading
To see live spreads and contract specifications on every VantoTrade symbol, open the trading calculator or check the symbol specification panel inside MT5. For the related execution cost paid on every position, see the definition of the spread in trading, and for how positions are sized in pips and lots, see what a pip is. For context on how high-impact events concentrate volatility, the breakdown of US CPI day on gold and silver shows the conditions where slippage is widest.
