What is Slippage?
Slippage refers to the difference between the expected price and the final executed price of a trade, which usually occurs during periods of high volatility or low liquidity. This phenomenon can have a significant impact on trading outcomes, especially in markets such as Forex, stocks, and cryptocurrencies. To manage slippage, using limit orders instead of market orders, choosing brokers with high liquidity, and carefully analyzing market conditions can be helpful.
Slippage typically occurs in markets with high volatility or in conditions where there is insufficient liquidity. Slippage can happen in all markets, including stocks, Forex, cryptocurrencies, and even futures markets.