Play DUNK Trade & Get 15% OFF
Play Now
Hola PrimeLogin/Register

Slippage Explained: How and Why It Occurs

Nov 27, 2025
Slippage Explained: How and Why It Occurs

Slippage is a fundamental concept; it refers to when there is a difference between the stated price at which you wish to execute your trade and the actual price your trade is executed. You will generally find slippage when the market is moving very fast and/or if there is a lack of liquidity at the time your order hits the market.

One Time

20% discount

on all accounts
Get Funded

Here's an example to clarify this further. Let’s say that a trader places an order to BUY EUR/USD at 1.10000; however, by the time the order reached the market, the price had moved slightly, and the trader was filled at 1.10030. This represents a difference of 3 pips, and it's called slippage. Sometimes the trader may receive a better price, and sometimes the trader may receive a worse price. When the price that the trader was filled at was better than what they expected, it is referred to as positive slippage. Conversely, if the price that the trader was filled at is worse than what they expected, it is referred to as negative slippage.

The Cause of Slippage

There are a variety of reasons that slippage occurs, but the most significant cause is the delay between when the trader places the order to buy or sell and when that order is executed. During that short delay, there is the opportunity for the market price to change. This has the potential to be particularly prevalent when there is strong upward or downward movement in the market.

Another factor is available volume. If the exact price level you are targeting does not have enough orders on the other side, your order gets matched at the next best price. This is common during news spikes, unexpected announcements or times when the market has very few participants.

Traders usually notice slippage around major economic releases, at the opening of a session or when the day is winding down, and liquidity dries up. Prices can jump in these moments, and the market may not have enough volume to fill every order at the requested price.

Is Slippage Always a Bad Thing?

A lot of traders assume slippage only works against them. In reality, it can go either way. When the market moves in your favour during execution, and you receive a slightly better entry, that is positive slippage. When the price slips in the opposite direction and you get an unfavourable price, it becomes negative. Both outcomes are simply part of normal market behaviour, especially when conditions are unstable or liquidity is thin.

How Traders Can Manage Slippage

You cannot remove slippage entirely, but you can reduce the impact with a few practical choices.

  • Keep your risk in check by using stop loss orders and avoiding unnecessary leverage.
  • Do not overload a single position with a large lot size when the market cannot support it.
  • Be cautious around important events because volatility tends to push prices around aggressively.
  • Try not to trade during quiet hours when liquidity is known to be low.
    When you need tighter control over the execution price, limit orders can offer more stability.

Final Thoughts

Slippage is simply part of trading. Every market has moments where prices jump faster than orders can be filled. By following good risk management and choosing your execution moments with care, you can keep its effect to a minimum and trade with more confidence.

About the Author: Sam Saleh

Sam Saleh, a London-based trader, began his trading journey at 19 while studying Business at the University of Bedfordshire. With expertise in trading and a background in marketing, he now coaches at Hola Prime, where he develops educational content aimed at building trader confidence, consistency, and financial literacy.

FAQs

Still Have Questions?

Feel free to get in touch with us today!

Book a MeetingArrow
Slippage is the gap between the price you put your order at and the price at which your order gets filled during execution.
It often appears during major news events, sudden volatility spikes or periods of low liquidity.
Yes. If your order gets filled at a better price than requested, it is known as positive slippage.
It happens when the price moves quickly or when there isn’t enough available volume at your chosen price level.
Using limit orders, avoiding oversized positions, and being cautious around high-impact news can help lower slippage.

Disclaimer

All information provided on this site is for educational purposes only, related to trading in financial markets. It is not intended as financial advice, business or investment recommendation, or as an opportunity or recommendation to trade any investment instruments. Hola Prime only provides an educational environment to traders, including tools, materials and simulated trading platforms which have data feed provided by Liquidity Providers. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local laws or regulations.

Our Community

Join our discord server to connect with our community of active traders.

Join Discord

24/7 Customer Support

Our support staff is available to you 24/7.

About: Simulated trading operations are managed by Hola Prime Limited, a company registered at L1, Shaw House, 201 Wan Po Road, Tseung Kwan O, Hong Kong.
Holaprime Limited a company registered in Cyprus having registration number HE 454359 is a 100% subsidiary of Holaprime Limited Hong Kong.
For MT4 And MT5: Hola Prime Limited, with Company registration number 220248, and registered office at 4th Floor, Docks 4, The Docks, Caudan, Port Louis, Mauritius, is authorized and regulated by the Financial Services Commission (FSC) of Mauritius as an Investment Dealer (Full Service Dealer, excluding underwriting) under license number GB24203729.
For DXTrade, cTrader and MatchTrader: Gooey Trade, GT Tech LLC 6800 Broken Sound Parkway Northwest Suite 150 Boca Raton, FL 33487 US

RISK DISCLOSURE:
All of the information provided on this website and by Hola Prime Ltd, or its affiliates, is intended solely for Educational purposes. Nothing on this website is to be construed as investment advice, nor an offer or invitation to buy or sell any financial instrument, nor does it endorse, recommend, or sponsor any financial product, company, or fund. Testimonials on the Company’s website may not be reflective of the experience of other clients or customers and should not be considered as an assurance of future performance or success. Hola Prime only provides services of simulated trading and educational tools for skill assessment and enhancement of traders. Hola Prime does not act as a broker and does not accept any deposits. Any purchases made should not be regarded as deposits. There are no promises of rewards or returns. Trading in financial markets is inherently high-risk and speculative. The content and information provided on this website are not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.

HYPOTHETICAL PERFORMANCE DISCLOSURE:
ACFTC Rule 4.4-Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses is material points, which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program, which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect trading results. Testimonials appearing on this website may not be representative of other clients or customers and are not a guarantee of future performance or success.

EVALUATION DISCLOSURE:
The customer pass rate of the Challenge/Evaluation program was 35% between 10th November, 2024 – 29th May, 2025, who traded at least one evaluation and obtained a Hola Prime Account during this time period. The Challenge and Hola Prime Accounts are meant to be a realistic simulation of trading under actual market conditions, including commissions, to mimic real market conditions, as much as possible. The evaluation is difficult to pass even for experienced traders. The Evaluation is not suggested for individuals with little to no trading experience.

CUSTOMER COMPENSATION DISCLOSURE:
All trades presented for compensation to customers should be considered hypothetical and should not be expected to be replicated in a live trading account. Hola Prime Accounts may represent simulated accounts or live or copied accounts. Hola Prime does not provide services to the residents of certain countries including – Afghanistan, Belarus, Burundi, China, Cuba, Congo, Sudan, Sri Lanka, North Korea (Democratic People’s Republic of Korea) and Yemen.

This is the only website for Hola Prime. We are not using any third party websites or links. Any link, outside of this website that claims to be ours, could be fraudulent and users are advised to not use it.