Slippage means that the final execution price is different to the expected execution price. It happens during placing an order and when it is executed. When the market moves rapidly, the slippage may occur due to the delay of the execution.
When performing forex trading, sometimes there might be a subtle deviation between the actual transaction price and the set price (price when the order is close). This phenomenon is called "slippage", which is common and part of the trading. Slippage may bring a positive or negative impact on the trading.
Slippage occurs due to volatility of the market and execution speed, which may happen during major news announcements or the release of important economic data. As high volatility may cause low liquidity, an order might not be executed at the requested price, and therefore liquidity providers might fulfill the order with the second-best price closest to the execution price.
Factors that may cause slippage are:
1) When the market is highly volatile with low liquidity, it is possible that an order might not be executed at the requested price of an investor. Thus, liquidity providers will use the second-best price to fulfill the order.
2) Since market prices change in milliseconds, there may be slight changes in prices due to the speed of the execution time, even if your electronic communication network (ECN) has completed the transaction at your desired price.
VT Markets prioritises investor protection amidst market volatility, and our clients experience the advantages of a sophisticated trade management system. This system is designed to reduce the risk of negative slippage and ensure execution at the best available price.
If you have any additional concern regarding the slippage of your position, please use your registered email to send the following details to trading@vtmarkets.com :
1. Trading Account Number
2. Position ID (Order Number)
3. Time
4. Screenshot
5. Description in details