What is slippage in forex trading?

What it means

Slippage happens because the price shown on your screen is the last price, not a promise. Between the moment your order leaves your terminal and the moment it reaches the broker, the book can change. In fast conditions it changes a lot.

Why it matters

It is not always against you. Positive slippage — a fill better than requested — is real and common on genuine ECN execution. A broker whose slippage is consistently negative and never positive is telling you something about how orders are handled, and that pattern is worth checking in your own trade history rather than taking on trust.

What this changes in practice

For automated systems slippage is the main reason live results underperform a backtest. A replay fills every order at the modelled price; reality does not. When we compared our own replay against live trades, execution differences and same-strategy stacking together accounted for most of the gap — which is why any backtest figure on this site is published alongside its caveats rather than as a headline.

A stop can also fill far from its level when gold gaps over a weekend: we measured 52 of those gaps.