Slippage

Slippage is the gap between the requested or expected execution price and the price at which an order actually fills, arising because price can move in the instant between order and execution, or because available volume at the quoted price is insufficient. It applies to market orders and to stop orders (which become market orders when triggered), and it can run for or against you, though traders feel adverse slippage most. It tends to spike when liquidity is thin or volatility is high — major economic releases, central-bank announcements, and the gap at the weekly open are classic culprits. Guaranteed stops, limit orders, and avoiding trading through high-impact news are common ways to reduce exposure to it, each with their own trade-offs. Because slippage is variable and not always avoidable, prudent plans assume real-world fills can be slightly worse than the screen price.

In plain English — Slippage is what happens when your order fills at a different price than you intended, usually because the market moved or there was not enough liquidity at your price. It can be negative (a worse fill) or, occasionally, positive (a better fill). It is most common during fast-moving markets, around news releases, and at session opens. Slippage is a normal part of trading, but it can meaningfully widen losses if your stop fills far past its level.

You place a market buy expecting 1.1000, but price is jumping and you fill at 1.1004 — 4 pips of negative slippage, about $40 extra cost on a standard lot. A stop-loss can slip the same way during a sharp move.