price gaps or slippage

In trading, "price gaps" refer to a situation where the price of a security jumps from one level to another without trading at the levels in between. "Slippage" refers to the difference between the expected price of a trade and the actual price at which the trade is executed.

n Forex trading, the term "slippage" refers to the difference between the price you see on the chart and the actual price at which your trade is executed. Slippage occurs when you attempt to enter a position at a specific price, but your position opens at a different price. This happens due to rapid price fluctuations, which can cause uncertainty in the market.

You are analyzing the EUR/USD currency pair, and when you click the BUY button, the market is at 1.1231. However, you notice that your trade is executed at 1.1240. This price difference is called slippage, which in this example is 9 pips.

Which trades are affected by slippage?

Slippage affects manual trades, stop-loss and take-profit orders, and pending or limit orders.

Slippage will not affect your trade if you use limit orders. For Limit Sell and Buy Limit orders, if the price gaps through your limit order, your limit position will not be activated, and you will not experience slippage.

When does slippage occur?

Slippage can occur during rapid price fluctuations, news releases, and price gaps, such as those occurring on Monday mornings after the Forex market has been closed for two days.

Always try to choose a broker that is regulated by a reputable authority. Even if your broker is regulated, slippage does not necessarily mean that the broker is deceiving you. These price changes are not always manipulative, and slippage in trades is not necessarily an illegal action.

It is recommended not to take manual positions during very important news events. You can always check the spread fluctuations and avoid trading when the spread widens.

During Rapid Price Fluctuations: In highly volatile markets, prices can change very quickly, leading to slippage.

News Releases: Significant economic news or announcements can cause sharp price movements, increasing the likelihood of slippage

Market Openings: Slippage is common when markets open after a weekend or holiday due to gaps in price. For example, prices can gap significantly on Monday mornings after a two-day break.