Slippage

Slippage occurs when a trade executes at a different price than what the trader expected at the time of order submission. In forex markets, slippage is most common during high-volatility events such as news releases, market opens, or periods of low liquidity. The difference can be positive (better price) or negative (worse price), though traders typically focus on negative slippage as it erodes profitability.

For forex brokers, slippage is closely tied to execution model. ECN brokers pass orders directly to liquidity providers and may experience slippage during fast markets. Market maker brokers can offer fixed execution but may re-quote orders instead. The spread a broker offers is related but distinct from slippage, as spreads represent the bid-ask difference while slippage reflects execution lag.

Slippage matters for affiliate and IB programs because it directly affects trader satisfaction and retention. Introducing brokers promoting low-spread brokers must also consider slippage quality, as excessive slippage reduces the effective value of tight spreads. Traders who experience consistent negative slippage are more likely to churn, affecting RevShare and lot-based commission earnings for partners.