Slippage is the difference between the price you asked for and the price you got. Negative slippage is a worse fill, positive slippage a better one. It happens because a market order fills at the best price available when it reaches your broker, and in a fast market that can be some way from the price on your screen when you pressed the button.
Three reasons a fill differs from the signal
Slippage is only one reason a trade opens away from the signal's entry. The other two are the spread and the delay, and each of the three has a different fix.
The spread. Every price has two sides: a buy opens at the ask and a sell at the bid. If the price you were watching was the bid, a buy fills higher by the spread even when nothing has moved. That is a cost of the trade, not slippage, and on gold it widens at night.
The delay. Between the signal being posted and your order reaching the broker, the price can move. Every way of copying a signal, by hand or by copier, has this gap.
Slippage. Even with no delay on your side, the price can move between the moment you press the button and the moment the broker fills the order. The faster the market is moving, the further apart those two prices can be.
What slippage costs
Take an example EUR/USD ask of 1.08500, the price a buy fills at. You press Buy by Market and the order fills at 1.08530: 3 pips of negative slippage, since a pip on EUR/USD is 0.0001. Had it filled at 1.08480, that would have been 2 pips of positive slippage, the same mechanism working for you.
Slippage is a distance, and what it costs depends on your lot size. A EUR/USD pip is worth $10 on 1.00 lot (100,000 units × 0.0001), so those 3 pips are $30 on 1.00 lot, $3 on 0.10 and $0.30 on 0.01.
It also changes the shape of the trade. On a buy with a 30-pip stop, a fill 3 pips worse leaves you 33 pips from the stop and 3 pips less to gain at the first target than the signal intended. If you sized the trade from the signal's 30 pips, the loss at the stop is now 10% bigger than you planned.
Which orders slip
- Market order, buy or sell. Fills at the best available price when it reaches the broker. It can slip either way, and more in a fast market.
- Stop loss. Becomes a market order when the price reaches it, so it can fill beyond the stop, worst in gaps.
- Buy stop or sell stop entry. Also becomes a market order when the price reaches it, and slips like a stop loss.
- Buy limit, sell limit or take profit. Fills at its price or better. It never fills worse, but it may not fill at all.
A stop loss is an exit at the market, not at its level. If the price trades through the stop, the fill is at or near it; if the price jumps past it, the fill is wherever trading resumes.
Limits work the other way round: they cannot slip against you, but a price that only touches the level can leave them unfilled. You are choosing between certainty of price and certainty of fill.
When slippage is worst
Slippage is worst when the market moves fast or liquidity is thin: in the minutes around big scheduled data, in sudden news spikes, at the Sunday open and at the daily rollover. The best time to trade gold guide lists when the main data and the rollover land in UK time.
The weekend gap is the clearest case, because nothing trades between Friday's close and the Sunday open. Take an example gold buy with its stop at 4,100.00, with gold closing on Friday at 4,104.00 and reopening on Sunday at 4,095.00. No trade ever happens at 4,100.00, so the stop becomes a market order at the open and fills at the best price available, around 4,095.00.
Counting a gold pip as $0.10 of price, that fill is $5.00, or 50 pips, beyond the stop: on 0.10 lots of a 100-ounce contract, $50 more than planned. A big data release can do the same within the day, when the price jumps several pips between one quote and the next.
Copying a signal adds a delay
Between a signal and your fill there is a chain: the message is posted, it reaches you, and your order reaches the broker. By hand, the middle of that chain is the notification, opening MT5, finding the symbol and typing the lots and the stop. A copier takes you out of the middle, but the message still has to reach it and its order still has to reach the broker.
That delay is one source of the difference between a channel's record and your account. The record starts from the price in the message; your account starts from your fill, after the delay, the spread and any slippage. Positive slippage exists too, so the difference does not always run against you.
The short version
- Do not enter at market in the seconds after a release. Let the first move settle, then check the entry is still valid.
- Use the signal's limit level when it gives one. A limit fills at its price or better, or not at all; the order types guide shows which order a signal needs.
- Set a maximum deviation where your platform offers one. On some account types, the MT5 order window lets you set the maximum deviation you will accept.
- Expect a stop to fill beyond its level in a gap. Size anything you hold over a weekend or into a release with that in mind.
- Check your fills. The History tab in the MT5 Toolbox shows the price each trade opened and closed at. Compare the open with the signal's entry and, on a stopped trade, the close with the stop.
On the Forexero Copier
The Forexero Copier has two price guards, both described on its parameters page. Max deviation to Telegram signals (in pips), 10 by default: if the market has already moved more than this many pips away from the signal's entry by the time the copier receives it, the trade is skipped. Max trade deviation, MT5 (in points), 100 by default, which is 10 pips: the slippage tolerance passed to your broker on execution, and orders that cannot be filled within it are rejected by the platform.
Every closed signal is on the record
The results page lists each closed VIP signal with its entry, stop, targets and outcome, stops included.
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