What is Slippage
IMPORTANT: Axi does not offer a guarantee on stop losses. It is possible to receive negative slippage which can result in you losing more than the balance of your account.
Whenever an order is placed between one of these parties there is a time delay (even if only for a fraction of a millisecond). If prices change during that time delay then there could be SLIPPAGE.
When slippage occurs you don’t get the price you were quoted, instead, you get the next best price that is available. When you place a large order you could be slipped because there are not enough buyers or sellers to take your trade.
Slippage occurs when:
- There is volatility – Such as news events
- Fast moving markets – Such as during a breakout
- Illiquid markets – such as public holidays
- Over the weekend
HOW TO AVOID SLIPPAGE?
You can’t avoid slippage all together, but you can minimize it by:
- Close trades before the weekend
- Trading with a broker with good banking relationships
- Breaking up large orders into smaller chunks
For more information on slippage, please check here.