Slippage refers to the difference between the expected execution price of an order and the actual price at which it is executed. It occurs particularly during high volatility, low liquidity, fast market movements, or when using market orders. Slippage can be either positive (better price than expected) or negative (worse price). In forex trading, slippage is a common phenomenon, especially during fast price movements or major economic news releases when stop-loss orders are triggered. The extent of slippage depends on market liquidity, order size, broker execution technology, and the market model (ECN vs. market maker). Traders can reduce slippage by using limit orders, trading during liquid market hours, and choosing a high-quality broker.
