Slippage refers to the difference between the expected price of a trade and the actual price at which the trade is executed. This phenomenon typically occurs during periods of high volatility, low liquidity, or due to market conditions that cause rapid price movements. For instance, when a trader places a market order, the execution may happen at a different level than anticipated, resulting in slippage. Generally, slippage can be either positive or negative, depending on whether the executed price is better or worse than expected. Understanding slippage is important for traders, as it can impact execution costs and overall trading performance.
Market Education