Slippage

Slippage occurs when a trade is executed at a different price than the one expected or requested, typically during periods of high volatility, low liquidity, or major news events. Slippage can be positive — when a trade fills at a better price — or negative, when it fills at a worse price. Negative slippage is the more common concern for traders, as it reduces profitability and can shift the risk/reward profile of a trade unfavorably. Using limit orders instead of market orders, choosing brokers with fast execution, and avoiding trading during high-impact news releases are effective ways to minimize slippage.