⚠️ How Slippage Can Destroy Your Risk Plan (and How to Reduce It)
🎯 The Lesson
Most traders calculate risk assuming perfect execution.
But real markets don’t give perfect execution — they give slippage.
Slippage turns a controlled 1% risk into 2%, 3%, or even more during fast conditions.
If you ignore slippage, your entire risk plan becomes unreliable.
⚙️ Step 1: What Is Slippage?
Slippage = the difference between your intended price and the actual filled price.
Example:
You set stop loss at 1.2000
Price jumps rapidly
Stop gets executed at 1.1992
You lose 8 extra pips.
Your 20-pip stop becomes a 28-pip loss.
This ruins your R:R and increases drawdown unexpectedly.
📉 Step 2: Why Slippage Happens
Slippage occurs mostly in:
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High-impact news (NFP, CPI, FOMC)
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Low-liquidity moments
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Overnight gaps
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Session transitions
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Volatile pairs (XAUUSD, NAS100, GBP pairs)
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When spread widens suddenly
It’s not your broker “hunting” you —
it’s how markets execute under stress.
🔢 Step 3: Calculate Your “Slippage Risk Cushion”
If your average slippage during volatility is 4–10 pips,
your stop must account for that extra distance.
Example:
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Intended stop: 20 pips
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Average slippage: 6 pips
True risk = 26 pips, not 20.
Now calculate lot size using 26 pips instead of 20.
This keeps your risk real — not theoretical.
📊 Step 4: Reduce Slippage by Choosing the Right Market Times
Lowest slippage:
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London session
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New York session
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High-liquidity moments
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Major forex pairs (EURUSD, USDJPY)
Highest slippage:
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Pre-news & post-news spikes
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End of New York session
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Asia session on volatile assets
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Thin liquidity Fridays
Trading in the right window reduces slippage dramatically.
🧬 Step 5: Use Pending Orders Carefully
Market orders during volatility = highest slippage.
Better options:
✔️ Limit orders during pullbacks
✔️ Stop orders away from noise zones
✔️ Avoid orders inside liquidity zones
Pending orders help, but only when placed logically —
not in front of obvious stop-hunt areas.
🛡️ Step 6: Use a Broker With Good Execution
Things to look for:
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Low average slippage report
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NY4 / LD4 data center routing
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ECN accounts
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Deep liquidity providers
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Tight spreads during news
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Fast execution speed (<50ms)
A poor broker can double your slippage without you realizing it.
🚀 Takeaway
Slippage is not a small detail —
it’s a risk multiplier.
If you don’t account for it, your risk percentages become lies, your stops become inaccurate, and your drawdowns become deeper than expected.
Control slippage → control true risk → protect your account.
Smart traders don’t fight slippage — they anticipate it.
📢 Join my MQL5 channel for more trading & risk-management insights:
👉 https://www.mql5.com/en/channels/issam_kassas
