Slip point refers to a trading phenomenon in which the customer places an order and the actual trading point is different. Many people know what a slip point is, but they don't know how it comes from. Some people say that when the market changes greatly, there will be slippage; Some people even say that it is impossible not to slip, but this is not correct. The correct statement is that the slip point is either intentional by the dealer or the service of the dealer can't keep up. The following explains this problem in detail:

1. The dealer slipped on purpose.

Foreign exchange trading is different from stock and futures trading. Stocks and futures are matching transactions, while foreign exchange transactions are transactions between customers and banks through platforms. Banks have transactions with customers and banks have net positions. By sneaking, the transaction price is unfavorable to customers, and banks and distributors are profitable. Even some banks privately agreed to share the slip points when signing cooperation treaties with distributors. Of course, some traders will not push the customer's transaction bill to the market. At this time, it is more beneficial for them to slide a little.

Second, the service can't keep up with the slippery point.

Generally speaking, foreign exchange trading means that banks provide quotations to traders, and traders provide quotations to customers. When a customer makes a transaction, the transaction instruction arrives at the dealer's server and is then forwarded to the banking system, where the transaction is made. Due to the existence of forwarding, the quotation will be partially distorted, and the slip point will be inevitable when the market is big.

Therefore, by improving the service, we can avoid slipping, but the cost is high. First of all, the server should be good and the application software should be advanced. In addition, the most important thing is that the trader's quotation comes directly from the bank and has not been forwarded. Data transmission comes directly from the bank, and both sides have high costs. In addition, banks charge dealers rent, which is extremely expensive. Ordinary traders (even regular traders) feel that it is not cost-effective and generally do not want to do so.

Any platform will have this problem. This should be explained from the root causes of slippage: the stability of platform software, the stability of server and so on. Generally speaking, regular traders can solve this problem well, and these powerful traders will not be stingy under these hardware facilities.

But there are many situations that traders can't control, and the main reason is the liquidity of funds. Generally speaking, retail investors are most concerned about the spread of foreign exchange companies, because the spread is low and the transaction cost of customers is low. However, many retail investors have neglected an important factor behind the price, liquidity.

Liquidity follows quotation. At present, the market is the largest amount that can be traded. Suppose that the quotation of Euro to USD seen by customers on the platform is 1.3000, and the acceptable trading volume of the market at this price is 500W W W. What if customers place an order of 600W?

Among them, 500W will be sold at 1.3000, and the remaining 100W will be sold at the following price, which may be 1.300 1 or higher. (Because of this, we suggest that you use a powerful investment platform to trade, which will often reduce the slippage on the platform, because large traders can get more favorable prices and larger trading volume from the quotation bank.

There are detailed articles in the blog of my space, and my contact information is in the user information. If you don't understand anything, you can ask me. I hope I can help you.