Trading mechanics
Slippage
The difference between the price requested and the price filled. It appears when the market moves between order and execution, and it is most pronounced around news and at thin points in the session.
GFN’s figure
Slippage does not excuse a breach on a GFN account. Traders are responsible for position sizing with enough room for changing market conditions, and a simulated environment still models spread changes and execution differences.
- Does slippage excuse a breach?
- No
- Zero slippage
- Not offered - conditions are modelled, not idealised
- Gapping markets
- A stop is executed at available prices, not the requested one
In detail
Slippage,explained
Slippage is not always negative - fills can improve as well as worsen - but it clusters against traders in fast markets, because that is when prices move furthest between request and fill.
It matters most for a stop loss. A stop is an instruction to trade at market once a level is touched, not a promise of a price, and in a gapping market the fill can be well beyond the level.
Related
Terms thatcome with it
Most rules only make sense next to the ones they interact with. These are the entries this one depends on.
Spread
The gap between the bid and the ask price. It is the cost paid on entry: a position opens slightly underwater by the width of the spread before the market has moved at all.
Execution
The process of turning an order into a filled position - the price received, the delay before it arrives, and whether the order is filled in full. It is where a strategy meets reality.
Stop loss
A resting order that closes a losing position at a predetermined level. It is the mechanism that turns a risk-per-trade figure into an actual limit rather than an intention.
Liquidity
How much can be traded at a given price without moving it. Deep liquidity produces tight spreads and reliable fills; thin liquidity produces wide spreads, slippage and gaps.
News trading
Trading around scheduled economic releases, where volatility and spreads both spike at once. The strategy depends on execution quality at exactly the moment execution quality is at its worst, which is why most firms restrict it on funded accounts.
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