Are you afraid of slippage when choosing a broker? | Forex Factory

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Are you afraid of slippage when choosing a broker?

  • #1
  • First Post: Jun 28, 2017 7:30am Jun 28, 2017 7:30am
Dear buddies,
I am having some concerns related to slippage issue. Sometime on unnoticed moment the market can rock up or plunge like 70-100 pips on 1 minute bar. My trades got very tight stop/target levels like 10-20 pips so it is possible slippage causes my trades huge losts or inaccurate entry points. What is your advice on that?
Thanks
  • #2
  • Jun 28, 2017 9:24am Jun 28, 2017 9:24am
the market can move about 100 pips (or much more in some cases) if their is a major news release. even the spread can widen several pips. the brokerage system cannot handle orders at the right prices during news release.

i dont know if you are aware of news release but if you trade 1 min chart you should check economic calendar so you can know when to stay out of the market. still i have to advice you to not trade the lower time frames because most often people end up with losses and many other reasons. trade at least 4 hour chart. daily chart is even better.
  • #3
  • Jul 1, 2017 9:58am Jul 1, 2017 9:58am
Quoting waverhythm
the market can move about 100 pips (or much more in some cases) if their is a major news release. even the spread can widen several pips. the brokerage system cannot handle orders at the right prices during news release. i dont know if you are aware of news release but if you trade 1 min chart you should check economic calendar so you can know when to stay out of the market. still i have to advice you to not trade the lower time frames because most often people end up with losses and many other reasons. trade at least 4 hour chart. daily chart is...
I somewhat disagree. I don't look at the economic calendar at all. I found that often times price had moved in my favor during the news. I trade lower time frames but keep a relatively tight stop
  • #4
  • Jul 1, 2017 11:18am Jul 1, 2017 11:18am
tight stops help nothing if they are slipped due a sudden move, news or not 20-50 pips...
i had some 30 pips slip on some stop orders, and yes, they also exist on take profit, if the broker is fair.
there is always, always another trade!!
  • #5
  • Jul 1, 2017 11:21am Jul 1, 2017 11:21am
Quoting profitfarmer
tight stops help nothing if they are slipped due a sudden move, news or not 20-50 pips... i had some 30 pips slip on some stop orders, and yes, they also exist on take profit, if the broker is fair.
That's true, but here's the thing. It's going to happen from time to time. When you get a sharp news move in your favor, it would more than make up for a bit of slippage when it goes against you. If you are consistently risking no more than 1-2% of equity per trade, then a 3% or even 4% slip on one trade will not make or break you in the long run.
  • #6
  • Jul 1, 2017 1:40pm Jul 1, 2017 1:40pm
Quoting Madinvestor
{quote} That's true, but here's the thing. It's going to happen from time to time. When you get a sharp news move in your favor, it would more than make up for a bit of slippage when it goes against you. If you are consistently risking no more than 1-2% of equity per trade, then a 3% or even 4% slip on one trade will not make or break you in the long run.
I meant in general .
Slippage can break a strategy.
Had one, breakout, sound on backrest for 6+ month forward too...1.5x reward, 10SL, 15 TP...simple bled cash slowly as the pending entries were 80% of the time had slippage against me, 2-3 pips often...took the edge away.
Left both broker and strategy. But the lesson, it can and dies happen, and often can mean enough difference between a demo/backrest or live to turn win to loss.

If you aren't scalping, news trading, and risking small part of your account, of course there won't effect you much.
Spread widening just the same, can be meaningless, or can cause a margin call, depend how you trade, how much equity you get, how leveraged you are.

And yes, brokers can stop hunt. Not all, not the same, but surely had seen such.
The only way to know if you happy with your brokers execution is to trade live, and observe the fills time to time. Demo won't help.
there is always, always another trade!!
  • #7
  • Jul 1, 2017 3:44pm Jul 1, 2017 3:44pm
Quoting profitfarmer
{quote} I meant in general . Slippage can break a strategy. Had one, breakout, sound on backrest for 6+ month forward too...1.5x reward, 10SL, 15 TP...simple bled cash slowly as the pending entries were 80% of the time had slippage against me, 2-3 pips often...took the edge away. Left both broker and strategy. But the lesson, it can and dies happen, and often can mean enough difference between a demo/backrest or live to turn win to loss. If you aren't scalping, news trading, and risking small part of your account, of course there won't effect you...
Okay I see. Yes in that case it would negatively affect you. Especially if you are going for a small amount of pips per trade like scalping etc. Which broker was this so that we can all avoid it?
  • #8
  • Jul 1, 2017 4:03pm Jul 1, 2017 4:03pm
Exness.
there is always, always another trade!!
  • #9
  • Jul 1, 2017 7:40pm Jul 1, 2017 7:40pm
Yes slippage is a problem, there are several ways to mitigate against it.

1) Guaranteed stop loss. Some brokers offer these (e.g. IG is one I know, there may be others). This means that whatever happens in the market, your SL is guaranteed to be executed and filled at the requested level. No slippage. The only downside is they are not free, they usually have a 1 pip fee, but only if they are triggered. They won't, however, help with slippage on pending orders.

2) Guaranteed no slippage. Some brokers guarantee to fill your orders at your requested price with no slippage, ever. Great! You might think, but there are downsides; firstly, the only brokers I have ever found that offer this are market makers. Nothing wrong with that per se, but not everyone wants that.

The other downside is that there are tighter restrictions on how far away your pending orders and stop losses must be from the current price. For me this was the killer because it wasn't compatible with my trading strategy, but it might not be a problem for you.

3) Build slippage into your strategy.
It might be reasonable for you to account for a certain level of slippage within your trading strategy. When you have developed your system, if you find that you are constantly being thrown off course by slippage, then try to quantify it within define parameters, and adjust your strategy accordingly.

Tricky to do, because you will only get accurate slippage data from live trading, but with patience you can start to predict with reasonable certainty what your slippage level will average out to on a typical month. If your strategy can cope with this extra cost and still be profitable, great. If not, you'll have to adjust it.

If your strategy involves trading high-volatility events, such as nfp, interest rate announcements etc, then my advice would be to use a broker that offers guaranteed stop-losses or guarantees no slippage.
  • #10
  • Jul 2, 2017 10:24am Jul 2, 2017 10:24am
Quoting Forex-Jedi
Guaranteed stop loss. Some brokers offer these... Guaranteed no slippage. Some brokers guarantee to fill your orders at your requested price with no slippage, ever.
I had no idea such a thing existed. Thanks for the enlightenment on that.
  • #11
  • Last Post: Jul 15, 2017 2:02pm Jul 15, 2017 2:02pm
Quoting Forex-Jedi
Yes slippage is a problem, there are several ways to mitigate against it. 1) Guaranteed stop loss. Some brokers offer these (e.g. IG is one I know, there may be others). This means that whatever happens in the market, your SL is guaranteed to be executed and filled at the requested level. No slippage. The only downside is they are not free, they usually have a 1 pip fee, but only if they are triggered. They won't, however, help with slippage on pending orders. 2) Guaranteed no slippage. Some brokers guarantee to fill your orders at your requested...
this will not work in no possible way.

only 2 little tips why:

- market maker give you "Guaranteed no slippage" until they see you win, each money you win is the marketmaker losing. so after you win some time enough money the marketmaker will fill you slower, kick you out, whatever,..... some client was used as examples for the broker to fake marketing the broker as good, but thats only way.
- Guaranteed stop loss you cant set very short level when there are coming higher news.
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