Because of slippage, I changed 4 trading platforms

Before getting to the point, I have questions for you guys, is it serious in your Forex platform slippage? Under normal circumstances, will it be unacceptable for you that the slippage of 5 or 6 pips to 1 USD?

There are 3 traders from FOLLOWME who shared their experience of slippage as follow.

Trader A: Gold slippage often occurs, others rarely occur.

Trader B: None of the stop-loss orders I have traded in the past month or so are based on the stop-loss price, with a slippage of 2, 3, 5, or 6 points, and a maximum slippage of one dollar at a time.

Trader C: I have encountered many malicious slippages and changed 3 to 4 platforms.

For investment, if you want to do well, you must sharpen your tools firstly. The trading environment, order transaction speed, and the amount of "slippage" in the face of non-agricultural and other major market conditions are all important factors affecting the trading. It can be said that if the platform provides a good trading environment, it will increase the probability of investors trading profitably greatly.

 1.What is slippage?

Slippage refers to the difference between the expected price of a trade and the price at which the trade is executed. Many people know what slippage is, but they don't know how it occurs. It has also been said that it is impossible to be free from slippage, which is not true. The main reasons for slippage are: 1. The broker slips deliberately ; 2. The broker server cannot keep up.

The following explains the issue in detail:

A. The trader slips deliberately. Forex tradings are different from stocks and future tradings. Stocks and futures are matched trading, while Forex tradings are transactions between customers and banks through the platform, and between banks and customers. The bank has a net position. If there is slippage, the trading price is not conducive to the customer, and the bank and the broker will be profitable. Some banks even privately agree on slippage sharing when they sign a cooperation agreement with a broker. Of course, there are brokers who do not bring their clients' trading bills to market. At this point, slippage is of greater benefit to them.

B. The broker server cannot keep up. Generally, Forex tradings is banks provide quotes to brokers, while brokers provide quotes to customers. When a customer is trading, the transaction order will arrive at the broker's server, and then forward to the banking system to complete the transaction. Due to the existence of forwarding, the provided quotation will be partially distorted. When the market quotation is delining, slippage is inevitable. Although it is possible to achieve non-slippage by using advanced application software to improve the quality of the server, the cost is high.

Besides, banks have to charge brokers expensive rents, and the brokers (even regular brokers) feels it is unworthy and reluctant.

If it is negative slippage, it is a disaster for investors. Generally, if the broker is lack liquidity, investors will set stop-profit in advance even if they are profitable. That is, they could have earned 100 USD, but only ended up earning 70 USD due to negative slippage. Also, due to the negative slippage, they need to lose 100 USD but ends into a loss of 150 USD, if they close a position at a floating loss. If an extreme data quotation is encountered, investors will not control the slippage which is very unfavourable for investors.

2. "Slippage" is not terrible

"Slippage" is not a "derogatory word" that makes people frightened, but a neutral word. Because the positive slippage caused by a good trading environment can amplify profits and reduce losses. So, everyone must bring take stop-profit and stop-loss when trading so as not to miss the opportunity. At the same time, it’ s a good trading habit.

Actually, most investors will not observe and study their profit-making list so carefully. When there is a positive slippage, investors will make more money but not thank the platform, thinking that earning money themself is just supposed to be. But when they lose money, they always throw the problem to the platform, thinking that it is the loss caused by the platform slippage. As a result, brokers sometimes become "guts". Therefore, through specific analysis of specific events, it is necessary to find out the specific cause of slippage. Is it insufficient liquidity or the delay of network? In addition, it is recommended that you do not blindly trade at sensitive nodes such as non-agricultural and interest rate decisions without preparation. Experts often avoid such data quotes.

Also, the formal platform operation will not interfere with customer tradings and the malicious slippage are usually within a reasonable range. Because each platform is inextricably linked with the network environment at that time and so on. If the slippage is serious, as long as the platform has a good service attitude and proper handling of such things, it is also very good.