What Is Slippage in Trading?

Slippage is the difference between the price you expected and the price you actually got on a trade. It happens when the market moves in the moment between placing your order and it being filled, and it is usually worse in fast-moving or thinly traded markets. Educational, not financial advice.

Why it happens

• Fast markets — price moves between your click and the fill.
• Thin liquidity — not enough orders at your price, so you fill at the next available one.
• Market orders — they take the best available price, whatever it is, rather than a price you set.
• News and open — volatility spikes widen the gap.

Positive and negative slippage

Slippage can go both ways: you can fill slightly worse than expected (negative) or slightly better (positive). Over many trades the bad fills usually outweigh the good, so treat it as a cost.

How to reduce it

• Use limit orders when you need price control (see market vs limit orders).
• Trade liquid markets and calmer times of day.
• Avoid firing market orders into news spikes.

Why it matters for your edge

Slippage is a real, recurring cost that eats into your expectancy. A strategy that looks profitable before costs can be break-even or worse once slippage and commissions are counted.

Takeaway

Slippage is the gap between your expected and actual fill, worst in fast or illiquid markets. Use limit orders, trade liquid markets, and count it as a cost when you judge whether an edge is real.

Educational only — not financial advice; trading carries a real risk of loss.