What is the Slippage

Slippage refers to the difference between a pending order and the price that the order was filled or executed – it is a type of Forex trading orders caused by ‘gapping‘ in the markets. As a trader, this is a very common phenomenon, and the Slippage has positive and negative effects.

There are two common types of slip points:

1. During illiquid market conditions-either over a weekend or a break in the trading hours.

2. During volatile market conditions-usually around the release of a major economic news event such as interest rate.

How to treat slippage?

We believe in treating our clients fairly and equitably. We treat all Forex slippage scenarios exactly the same way as any financial exchange-this means Pro Capitals Limited does not interfere in the execution of client trades and the prices you receive and are executed at reflect the best possible prices received by Pro Capitals Limited from our counterparty.

In each case, Pro Capitals Limited gives its clients a better price when the market moves in favour of the client; but in the same condition, there will be a worse price for the client if the market moves against their favour. All price differences will reflect slippage rate that Pro Capitals Limited gets from its liquidity providers.

Example of Forex Slippage

The price of AUD/USD was 0.9045. After analysing the markets, you speculate that it is on an upward trend and open a long position of one standard lot on the AUD/USD at the current price of 0.9045 – expecting to execute at that same price of 0.9045.

The market follows your speculation, but goes past your execution price and up to 0.9045 very rapidly. Because your expected price of 0.9045 is not available in the market, you’re offered the next best available price. For the sake of the example, let’s say the price is now 0.9045.

In this case, you would experience positive slippage:
0.9045 – 0.9045 = 0.0005, or +5 pips.

However, let’s say your trade was executed at 0.9055, you would then experience negative slippage:
0.9050-0.9055=-0.0005,or -5 pips.

It is important to note that the Slippage may appear in all types of transactions, such as stop loss, arbitrage, buy/sell stops, and buy/sell limit orders. Since the Pro Capitals Limited use market transactions, there is no guarantee that such transactions will not occur.

We offer market transaction execution, and that's why we can't liquidate a price that doesn't exist. If the price you set is not available, your order will be directly tied to the current market by our foreign exchange liquidity provider.