Lesson 4 of 8 · 7 min
Execution and slippage
The price you click is not always the price you get. What execution quality means, how to test it, and which orders protect you.
By the end you'll be able to
- Define slippage and requotes and say when each happens
- Explain how market, stop and limit orders behave in fast markets
- Test a broker's execution on a demo and live account before trusting it
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Two traders click buy at the same moment on the same price. One is filled where they clicked; the other is filled five pips worse. Over a year, that gap is a broker’s hidden fee.
What execution means
Execution is how your order becomes a position: how fast, at what price, and whether the broker fills it itself or passes it on. Three things can go wrong:
- Slippage: the fill is at a different price from the one requested. It happens when price moves between your click and the fill, and it is normal in small amounts. Fair brokers slip both ways; some only ever slip against you.
- A requote: the broker declines your price and offers a new one. Common at dealing-desk brokers in fast markets; rare at ECN brokers, which fill at the next available price instead.
- Delay. Orders that take seconds to fill in volatile moments are slipping by design.
Orders and fast markets
Illustrative. Market and stop orders fill at the next available price, which in fast markets can be several pips away. Limit orders fill at your price or better, or not at all.
A market order asks for a fill now, at whatever the price is. A stop order becomes a market order when its level is hit, so it slips the same way. A limit order says “this price or better” and never fills worse, but in a fast market it may not fill at all.
Notice how, in the news condition, the market and stop orders fill several pips away while the limit either fills at your price or not at all. Each order type trades certainty of fill against certainty of price.
Quick check
Question 1 of 3
A broker's slippage is always against you, never in your favour. This suggests:
Question 2 of 3
Which order type can never fill at a worse price than you set?
Question 3 of 3
What is a requote?
Go deeper: Slippage in Forex: What It Is, Why It Happens and How to Limit It · STP vs ECN vs Dealing Desk: Broker Execution Models Explained