Forex Trading Seminar: What Is Slippage?

If you are thinking of attending a forex trading seminar, there are a few things that you should know before you start out. It would be a waste of time to turn up at an expensive trading seminar and not understand a single thing because you had not mastered the basic terminology of forex trading.

One of these terms whose meaning any beginning forex trader needs to know, is slippage. Slippage is a factor that can have a big effect on the outcome of trades and often, not in a good way. Traders will rage about it, especially if they do not feel that the price they got was justified. So what exactly is slippage?

In brief, it is the difference between the price that you would see and click on in your broker platform software, and the price that you actually get. It may seem that there should not be any difference, but there is, because the price can change in the second or two that it takes you to make the decision to click, click, and for the information to be transmitted over the internet.

It’s not long, but it can be long enough to make a big difference in the price if the market is volatile. This is particularly true at times of big developments in the market such as news announcements or an economic crisis.

Theoretically, slippage could work in your favor, but that does not often seem to happen in practice. More often, it works against the trader, and in some cases can wipe out almost the entire profit from what should have been a successful trade.

Slippage can depend on the broker. Some brokers may guarantee the displayed prices, but perhaps freeze trading at certain times to protect themselves. Others will have slippage at some times but not others. There are even brokers who have been accused by dissatisfied clients of deliberately applying slippage in order to

There are two things that you can do to minimize this problem. First, get to know your broker’s trading platform thoroughly using a demo account. When recording your demo trades, do not assume that you would always get the price that you clicked on. If there is no slippage in demo, remember that your system is likely to be a little less profitable when you use it for real, for this reason. Second, select your broker carefully, after checking feedback from other clients on a forex forum or at a forex trading seminar.