Forex brokers slippage: causes and how to minimize impact

4 min readJun 10, 2024

When it comes to Forex trading, there’s one thing that can throw even the most seasoned traders off track: slippage. That frustrating difference between the expected and executed trade prices can leave you scratching your head.

In this article, we will demystify the phenomenon of Forex broker slippage. We’ll explore what causes it and, more importantly, share practical tips to help you mitigate its impact on your trading strategy.

What is slippage in Forex trading?

In Forex trading, slippage refers to the difference between the expected price of a trade and the price at which it is actually executed. It typically occurs during periods of high market volatility or when there is a delay between placing an order and its execution. Slippage can result in traders getting a worse price than they anticipated, leading to potential losses or reduced profits. It’s a common phenomenon in the Forex market and can occur with both market orders and limit orders. Traders often seek to minimize slippage by using various strategies, such as trading during less volatile times or using limit orders to specify the maximum price they are willing to pay or the minimum price they are willing to accept for a trade.

How does slippage occur in Forex trading with brokers?

Slippage in Forex trading occurs due to several factors, primarily revolving around market conditions and broker practices. Here’s a breakdown of how slippage happens:

Market volatility:

Rapid price movements: During periods of high volatility, such as during major economic announcements or geopolitical events, prices can change rapidly. By the time your order reaches the market, the price may have already moved.

Execution speed:

Latency: There can be a delay between the time you place your order and the time it gets executed. This latency can be due to the speed of your internet connection, the broker’s processing speed, or the time taken to route your order to the market.

Liquidity:

Thin markets: In markets with low liquidity, there might not be enough buyers or sellers at the desired price. As a result, your order might get filled at the next available price, causing slippage.

Order type:

Market orders: These orders are executed at the best available price, which might differ from the price seen at the time of placing the order, especially in fast-moving markets.
Stop orders: These become market orders once triggered and can experience slippage if the market price moves quickly.

Broker practices:

Broker execution model: Different brokers have different execution models. Market makers might fill orders at their own discretion, which can lead to slippage. ECN/STP brokers route orders directly to the market, which can result in slippage due to external market conditions.
Requotes: Some brokers might offer requotes if the price changes before the order is filled, giving the trader a chance to confirm the new price. However, this can lead to delays and further slippage.

Forex slippage example

Imagine you place a market order to buy EUR/USD at 1.1000. Due to high volatility, by the time your order is processed, the price has moved to 1.1005. Your order gets executed at this new price, resulting in 5 pips of slippage.

How to minimize slippage in FX trading

Use limit orders: Specify the maximum price you’re willing to pay or the minimum price you’re willing to accept, thus avoiding unexpected fills at worse prices.
Trade during low volatility: Avoid trading during major news events or when markets are highly volatile.
Choose a reliable broker: Opt for brokers with fast execution speeds and transparent practices.
Monitor liquidity: Be aware of the liquidity of the currency pair you’re trading, as more liquid pairs typically experience less slippage.

Understanding and managing slippage is crucial for effective Forex trading, helping traders to minimize unexpected costs and improve overall trading performance.

Top Forex brokers with the lowest slippage

Choosing a Forex broker known for low slippage rates can make a substantial difference in your trading outcomes. Brokers with minimal slippage help ensure that your trades are executed at prices closer to what you expected, enhancing your overall trading strategy and performance.

In this list, we’ve explored the top Forex brokers that excel in providing low slippage rates. These brokers have proven track records of reliability, fast execution speeds, and transparent practices, all of which contribute to a smoother and more profitable trading experience. By opting for one of these brokers, you can trade with greater confidence, knowing that your orders will be executed accurately and efficiently.

BlackBull FX trading with the lowest slippage

One standout broker known for its exceptionally low slippage rates is BlackBull. BlackBull is a trusted and secure online forex broker, renowned for offering a wide range of trading instruments including commodities, currency pairs, stocks, futures, indices, and Cryptocurrencies. Regulated in Seychelles, BlackBull prioritizes the safety of its traders and provides various account types such as standard, prime, institutional, Islamic (no swap), and demo accounts for risk-free practice.

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Forex brokers slippage: guide to navigate and minimize impact

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