Forex Slippage Policy

What exactly is it?

In general, slippage refers to the difference between a pending order and the price that the order was filled or executed – it is a type of Forex trading orders caused by ‘gapping‘ in the markets.

A ‘gap’ in the markets refers to the situation where there is a time delay (even if it is only for a fraction of a millisecond) between the tradable prices and typically occurs under one of these circumstances:
1. During illiquid market conditions – either over a weekend or a break in the trading hours.
2. During volatile market conditions – usually around the release of a major economic news event such as interest rate.

It is common knowledge among experienced traders that slippage occurs naturally and all markets will be subject to slippage from time to time. It is usually seen during periods of extremely high or low volatility and during key news releases or during off market hours, and can work both ways – positively or negatively.

When does Slippage Occur?
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Extremely High or Low Volatility

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Off Market Hours

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Low Liquidity

Key News Releases

Rapid Price Fluctuation

Slow Execution Speed

How does EightCap treat slippage?

We believe in treating our clients fairly and equitably. We treat all Forex slippage scenarios exactly the same way as any financial exchange – this means EightCap does not interfere in the execution of client trades and the prices you receive and are executed at reflect the best possible prices received by EightCap from our counterparty.

In each case, EightCap gives its clients a better price when the market moves in favour of the client; but in the same condition, there will be a worse price for the client if the market moves against their favour. All price differences will reflect slippage rate that EightCap gets from its liquidity providers.

In addition, to provide our clients with the best pricing possible, we have invested heavily in establishing strong relationships with only the most reputable and reliable liquidity providers.

Example of Forex Slippage

The price of AUD/USD was 0.7115. After analysing the markets, you speculate that it is on an upward trend and open a long position of one standard lot on the AUD/USD at the current price of 0.7145 – expecting to execute at that same price of 0.7145.

The market follows your speculation, but goes past your execution price and up to 0.7155 very rapidly. Because your expected price of 0.7145 is not available in the market, you’re offered the next best available price. For the sake of the example, let’s say the price is now 0.7140.

In this case, you would experience positive slippage: 0.7145 – 0.7140 = 0.0005, or +5 pips.

However, let’s say your trade was executed at 0.7150, you would then experience negative slippage: 0.7145 – 0.7150 = -0.0005, or -5 pips.

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The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.