Slippage means that in foreign exchange transactions, the order price and the actual transaction price are not consistent, and there will be a deviation. For example, when placing an order, the exchange rate between China and the United States is 6.1154, but the actual purchase price is 6.1158. In daily life, we buy and sell according to the marked price, but in platform transactions, due to market fluctuations and technical limitations of the platform, there will be Certain slippage.

But this slippage is not random. Generally, even if the slippage of a regular platform is within a reasonable range, there will not be too much deviation. However, some profiteers and black platforms artificially control it in the background. Slippage only occurs when it is good for you and bad for your customers. That is to say, asymmetric slippage. The FXCM slippage penalty that broke out some time ago is exactly this kind of asymmetric slippage.

Financial products such as stocks, futures, options and foreign exchange do not have fixed prices. They have two rapidly changing prices - the market buying price and the market selling price.

The buying price is the buyer's quotation, and the selling price is the seller's quotation. Platforms like to sell at higher prices and buy at lower prices. Once buyers and sellers in the market lack enough confidence and patience, they will accept the platform's price to complete the transaction.

Different order types will lead to different situations. Limit orders limit the price to buy, and slippage is rare, but it cannot guarantee a transaction, and stop-loss orders control the risk of slippage. A market order is a direct transaction at the current price and a quick transaction. This type of slippage is the most common.

Market orders are usually executed directly, but it is difficult to control the price you want most. Giving up control means you need to bear the risk of slippage.

Before placing an order, you must carefully consider the relationship between price and time. Limit orders generally guarantee a desired price, but the transaction may fail because the price cannot be reached. Market orders are executed in real time, but the price always It is undesirable. Professional traders use limit orders because slippage often occurs with market orders.

Slippage losses are even greater than handling fees.

Forex trading is like a river with both opportunities and dangers. People on the shore can control the take-off, but people in the river also need skills to get ashore. Use limit orders to protect profits.