Broker Slippage | Forex Factory

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Broker Slippage

  • #1
  • First Post: Edited Aug 12, 2022 2:41pm Jun 27, 2022 12:14am | Edited Aug 12, 2022 2:41pm
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  • #2
  • Jun 27, 2022 12:21am Jun 27, 2022 12:21am
As the first example, I started testing IC Markets. The equity close was for 50 USD net profit. All trades closed in less than 1 second but the leftover equity was little over 30 USD. This is huge slippage.

Here's a screenshot for now. Next time I'll try to post live screen recoding of the trades closing in order to see the scam live.

Attached Image (click to enlarge)
Click to Enlarge Name: Screen Shot 2022-06-27 at 1.18.25 PM.jpg Size: 339 KB
  • #3
  • Jun 29, 2022 10:09am Jun 29, 2022 10:09am
Here's a 45 second live view of portion of profit magically vanishing probably due to "slippage" on IC Markets.
Attached File(s)
File Type: mp4 IC Markets Slippage.mp4   1.5 MB | 433 downloads
  • #4
  • Jul 1, 2022 7:42am Jul 1, 2022 7:42am
Update for IC Markets.
Attached File(s)
File Type: mp4 IC Markets 5 USD Slippage.mp4   901 KB | 333 downloads
  • #5
  • Edited 6:44am Jul 3, 2022 5:36am | Edited 6:44am
Sorry, I'm confused. I believe demo servers can not reproduce Market Executions, Your SL, TP and pending orders on a demo account will always be filled at your price. How did you calculate the slippage? I can only see some random pending orders opening and closing probably from an EA, I don't see the commission column either on the terminal which could explain the $5 you are missing.

I like your idea of discussing the executions.
  • #6
  • Jul 3, 2022 7:51pm Jul 3, 2022 7:51pm
Quoting bascupower
Sorry, I'm confused. I believe demo servers can not reproduce Market Executions, Your SL, TP and pending orders on a demo account will always be filled at your price. How did you calculate the slippage? I can only see some random pending orders opening and closing probably from an EA, I don't see the commission column either on the terminal which could explain the $5 you are missing. I like your idea of discussing the executions.
I've traded both live and demo and the issue I'm discussing is actually the same on both demo and live so I'm just using demo to illustrate.

Typically the slippage has been 20+ USD but I thought to start recording a videos of it to eventually take to the brokers because 20+ USD on 200 open trades is a bit excessie. I have experienced 50 USD in slippage. I think once, it was close to 100 USD in slippage.

I'll be recording videos again this week because I do want to show the brokers to discourage them from squeezing every drop of blood out of the retail trader.
  • #7
  • Jul 4, 2022 2:38am Jul 4, 2022 2:38am
Quoting bascupower
Sorry, I'm confused. I believe demo servers can not reproduce Market Executions, Your SL, TP and pending orders on a demo account will always be filled at your price. How did you calculate the slippage? I can only see some random pending orders opening and closing probably from an EA, I don't see the commission column either on the terminal which could explain the $5 you are missing. I like your idea of discussing the executions.
Correct, demo execution is quite misleading, some of my scalping strategies produced great returns on demo but failed on live accounts.
  • #8
  • Jul 4, 2022 7:25am Jul 4, 2022 7:25am
This isn't really about the strategy. This is about closing all trades at once and how much of your hard earned money the broker tries to take from you. I've tested this method on both live and demo and the amount of the hard earned taken is about the same on both live and demo.
  • #9
  • Edited 7:04am Jul 5, 2022 5:10am | Edited 7:04am
I really try to understand the thought process of your Testing, however, if your goal is to show the slippage I'm afraid it's incorrect.

There's no way even with a professional set-up your demo account will send the EA's request at the same milliseconds as your Live account, more importantly, there's no way your market execution orders from your Live account will be filled at the same price as your demo. Demo executions are mocked and they will be filled at your price all the time without slippage. That defeats the purpose of your testing.

I believe your missing part here is your floating unrealized profit vs your Net amount when you close the trades.

In your video you are showing your unrealized floating then you close all your orders to show your balance, however that doesn't show any slippage.
  • #10
  • Jul 24, 2022 5:56am Jul 24, 2022 5:56am
ICMarkets feed and execution is quite possibly the most legit on the market due to their size and order matching mechanism. Brokers without slippage, only have no slippage due to the dealer layer. Slippage is normal in the market, especially if spreads are retail level low (0-0.1 eurusd spread) because the top of the book is between 1k and 100k only or 0.01-1 lot. You will almost always slip if the top of the book is 0.01 lot.

If you don't understand slippage, dont trade.
  • #11
  • Jul 24, 2022 6:06am Jul 24, 2022 6:06am
If I don't understand slippage, I shouldn't trade? Great advice.

What I've seem from testing is, there is a lot of slippage no matter which broker I've tested. I've tested both demo and live.

It seems the only solution is to use TP.
  • #12
  • Jul 24, 2022 7:30am Jul 24, 2022 7:30am
Is a very good habit to test brokers and strategies, keep doing it. I was just curious about the thought process behind your testing as I believe you didn't take into account your unrealized P/L vs Net Amount, you can not have slippage in demo accounts and you will also have slippage with your TP. We all learning every day, don't worry, just don't blow your money trying to find the slippage.
  • #13
  • Jul 24, 2022 8:33am Jul 24, 2022 8:33am
Quoting bascupower
Is a very good habit to test brokers and strategies, keep doing it. I was just curious about the thought process behind your testing as I believe you didn't take into account your unrealized P/L vs Net Amount, you can not have slippage in demo accounts and you will also have slippage with your TP. We all learning every day, don't worry, just don't blow your money trying to find the slippage.
I think this is something the brokers can control but instead, I think they use this as an additional source of income. Maybe eventually there will be enough discussion around this to discourage brokers from taking your hard earned.
  • #14
  • Jul 24, 2022 10:08am Jul 24, 2022 10:08am
I think they have better ways much more subtle to increase their revenue, slippage never looks good for the broker, don't give me wrong, they are certainly not saints and they will do mistakes too but this mantra of people trying to justify their losses on the broker is becoming a joke sometimes., I'm not saying this for you, as I genuinely think you were trying to show your findings however they were wrong and I don't think you completely understand what slippage is yet, which is absolutely fine as we all have been there and this forum is to learn about trading and helping the community.
  • #15
  • Jul 24, 2022 4:59pm Jul 24, 2022 4:59pm
Quoting bascupower
I think they have better ways much more subtle to increase their revenue, slippage never looks good for the broker, don't give me wrong, they are certainly not saints and they will do mistakes too but this mantra of people trying to justify their losses on the broker is becoming a joke sometimes., I'm not saying this for you, as I genuinely think you were trying to show your findings however they were wrong and I don't think you completely understand what slippage is yet, which is absolutely fine as we all have been there and this forum is to learn...
Then you could you explain what you understand about slippage?
  • #16
  • Jul 25, 2022 2:31am Jul 25, 2022 2:31am
Essentially slippage is the deviation your order gets filled vs your expected price, slippage does not have a negative connotation per se as you can also have a positive slippage.

A demo order does not need to be filled by a counterparty, all your orders will be filled at your price without slippage, you said:

'I've traded both live and demo and the issue I'm discussing is actually the same on both demo and live so I'm just using demo to illustrate."

This is why I was confused as I don't know how you can illustrate slippage with a demo account.

It is important to understand the business model of your broker as that will tell you how they will execute the order, if you are trading with a market execution model once the order is triggered your order will be filled at the next price available .

Then you said that the only solution is to use a TP, that's when I realized your concept of slipagge is not clear.

It does not make any difference you use a TP , as by the time your TP gets triggered until your order is finally filled, the order can have a positive or negative deviation from your expected TP value. The more volatile the market the more chances your order will be filled with slippage, There are many more considerantions such how big is your order, time of the day you are trading, etc but hopefully you get the picture.

Some trading platforms will allow you to set up a limit order with the deviation you are willing to accept to execute the order, but you can be at risk of not getting out or in of the trade.

Some brokers offer Instant Execution but you will need think why they are able to do it and if you are OK with that.

I made plenty mistakes on the past and I keep learning every day, I hope you dont take it personal and you keep creating and testing models.

All the best.
  • #17
  • Jul 25, 2022 3:17am Jul 25, 2022 3:17am
Quoting bascupower
Essentially slippage is the deviation your order gets filled vs your expected price, slippage does not have a negative connotation per se as you can also have a positive slippage. A demo order does not need to be filled by a counterparty, all your orders will be filled at your price without slippage, you said: 'I've traded both live and demo and the issue I'm discussing is actually the same on both demo and live so I'm just using demo to illustrate." This is why I was confused as I don't know how you can illustrate slippage with a demo account....
Okay I see. Let me clarify what I was meaning by slippage on my end. I'm using stop and limit orders to make the entries. I'm not worried about entries at all. Then what I do is when all the open trades net positive, I close all using a utility which closes all in less than 2 seconds. Here's the problem, let's say the floating equity is 500 USD + or - a couple of dollars. What I've observed is that in less than 2 seconds when all trades are closed, I'm left with 450 USD for example. In other words, a significant amount is "taken" by the broker. This is what I've been calling slippage. I've tried this on both demo and live and the amount the broker keeps seems shameless.
  • #18
  • Jul 25, 2022 6:01am Jul 25, 2022 6:01am
But you are assuming your trading utility sends all the orders to the broker at the same time, 2 seconds is a lot of time. Perhaps your testing should be more focused on your Metatrader journal logs and you will see that your 50 100 or whatever orders you are trying to close are not sent to the server at the same time and consequently as they are market orders they will be closed at the price available, Also I wouldn't bother to test the processing time of a free demo account. Then you compare the time your utility took to send the order to the server and how long actually took the be executed. You would be surprised that most EAs, Paid utilities and Set-ups are not working for certain strategies.

Cheers
  • #19
  • Jul 25, 2022 6:52am Jul 25, 2022 6:52am
Quoting bascupower
But you are assuming your trading utility sends all the orders to the broker at the same time, 2 seconds is a lot of time. Perhaps your testing should be more focused on your Metatrader journal logs and you will see that your 50 100 or whatever orders you are trying to close are not sent to the server at the same time and consequently as they are market orders they will be closed at the price available, Also I wouldn't bother to test the processing time of a free demo account. Then you compare the time your utility took to send the order to the...
I think I have a workaround for this and that is to use a utility that automatically places TP SL right on Bid and Ask. I'm testing the utility. If someone wants it, I can post it here.
  • #20
  • Jul 28, 2022 12:23am Jul 28, 2022 12:23am
About 90% of my trades with IC Market closed with positive or no slippage.
You must be new to trading (or writing EA) if you are not familiar with how manage or reduce slippage.
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