When it comes to the forex market, there is a condition called forex trading slippage. It is such a kind of unwelcome surprise or a bonus depending on how it occurs.

You can understand it further to avoid losses and the way you can reduce it in your trading. Read this post and be a smart trader.

What is Slippage in Forex Trading？

There is a condition that your asking price does not match the price of your executed order. In trading, this is called slippage.

This is most common in highly volatile and fast-moving markets that are prone to unexpected and rapid changes in certain trends. The difference in the price can be either negative or positive.

The direction in which the price moves determine the difference. Whether you go short or long, and whether you close or open a position.

If your position is affected by slippage, your orders will still be executed by some brokers at the worst price. But a reliable broker like Salmamarket forex broker will do the best execution.

A professional broker will ensure to reject the order if the price movements are outside their tolerance level between the execution time and the time when the order is placed. So, you will not get losses.

When you open or close a position, this can give protection against the impact of negative slippage. However, if there is a better position for you, the broker will execute the order.

Additionally, you can protect yourself from slippage in other ways. You can use a guarantee stop or a stop limit on your active position.

When closing or entering a position, the limits will be helpful for you to avoid forex trading slippage. Your order will be done only at your requested price.

How Could Slippage Occur？

Generally, slippage occurs when the volatility of the market is high or the liquidity is low. If the liquidity is low, there will be only a few market participants.

And so, placing an order and the execution required more time after a seller or buyer has been found. The asset price can possibly change with this delay meaning that the slippage occurs.

Moreover, the price movements in a volatile market like the forex market can happen quickly. It sometimes even takes a few seconds to fill and order.

Forex trading slippage happens typically on currency pairs that are less popular. Generally, popular pairs like USD/JPY, GBP/USD, and EUR/GBP have low volatility and high liquidity.

For example, you want to trade the AUD/USD and open a long position. After the pair is quoted at $0.7026, it can be highly volatile. 

The time between the order execution and submission, however, the price might increase to $0.7028. in this case, a slippage has just occurred that makes you buy at a higher rate than your expectation.

With the best forex broker, however, as long as the price difference is not outside our tolerance limit, they will fill your order at the original requested price.

If the difference is outside the tolerance, the order will be rejected. With this, you can decide if you want to resend the order at the new price.

Trade With the Best Forex Broker

When it comes to trading forex, you need to understand many things. Traders need a professional broker to help them in trading. 

We are providing trading services for many countries in the world. Our legality guarantees you safe trading as the most important thing in your way to reaching successful trades.

We are the best partner that serves various great services you can choose. Trade with us and no need to worry about forex trading slippage.