Short Question about Slippage Pips

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Hello everyone,

I'm really sorry to ask this...I know there are a ton of questions about very similar subjects, but all I read where not answering my question.

I started a couple of weeks ago with MQL5 and wrote my first EA. Anyway, It is working fine, but I noticed that I have some slippage while trading (yep, normal)... on the site of my broker, I can limit the ammount of slippage in Pips (I limited it to 1 pip just to try) but the slippage is still the same.

I am Trading SP500 and I wrote some ouptput on the Strategy tester to undertand what is happening (see attached picture). In my EA I put an order in this case to sell SP500 (2 digits) at a value of 2477.93 and when the order is triggered, it sells at 2477.44. So with a difference of (2477.93 -2477.44 = 0.49 points), then If I understood right (which now I'm not very sure), if I take the 0.49 and divide it by 0.01 (2 Decimals of the SP500) I get 49 Pips which is much more than the limit of 1 Pip...

Am I doing nonsense? I asked my Broker and he ansewered : "this slippage is very under 1 Pip" ... well, thanks for the help dude.

I hope somebody can explain what I'm getting wrong with Points to Pips.

Thank you very much for your help!

Files:
EA_output.png  421 kb
 
The price that is set in the stop order is the price at which the order will be activated for further execution. The execution itself takes place at the price that is currently available.
 
JorgeJau: I am Trading SP500… I hope somebody can explain what I'm getting wrong with Points to Pips.

  1. 2477.93 -2477.44 = 0.49 or 49 points. The term PIP only applies to currencies.

  2. PIP, Point, or Tick are all different in general.
              What is a TICK? - MQL4 programming forum 2014.08.03

    Unless you manually adjust your SL/TP for each separate symbol, using Point means code breaks on 4 digit brokers, exotics (e.g. USDZAR where spread is over 500 points), and metals. Compute what a PIP is and use it, not points.
              How to manage JPY pairs with parameters? - MQL4 programming forum 2017.02.09
              Slippage defined in index points - Expert Advisors and Automated Trading - MQL5 programming forum 2018.01.15

 

Thank you very much for your replies!

Would it be possible that you tell me how to calculate Pips for this particular case so that I can understand it? (Not the code, just the math).

It is SP500 (2 decimals)... because in the other cases of the examples, they have 4 or 5 decimals and I really didn't get the concept apparently.

Let me see if I got it:

1 Pip = 0.0001 points

so in a 4 digit 1 point(0.0001) = 1 pip (0.0001)

in 2 decimals 1 point (0.01) = 100 Pips (0.0001 *100)  --> so in my case this 0.49 would mean 4900 pips...nope...didn't get it

Sorry, could you explain to me what I am doing wrong? I Mean, I read that Pips are only for currencies, but my Broker limits in Pips and also MT5 calculates in pips when I'm trading with SP500.

Thank you!

 
JorgeJau: Thank you very much for your replies! Would it be possible that you tell me how to calculate Pips for this particular case so that I can understand it? (Not the code, just the math).
It is SP500 (2 decimals)... because in the other cases of the examples, they have 4 or 5 decimals and I really didn't get the concept apparently.

It has just been pointed out to you in post #2 that it is NOT called "Pips" unless its a currency. If your broker is calling it "Pips", then they are naming it incorrectly or they are referring to something else. Make sure there is not a misinterpretation where the slippage control only applies to currencies and not to the SP500.

For SP500, it is called "Points" and 1 Point = $1.00. In this case it is a slippage of 0.49 Points ($0.49) and not 49 points, which makes it below the limit of 1 Point ($1).

Unless the broker is a Dealing Desk or Market Maker, it is usually NOT possible to limit your slippage at all, and you just have to accept the market conditions. So, make sure you are not misunderstanding the concept with your broker. If there is indeed a slippage control allowed by the broker, then they are a Dealing Desk / Market Maker broker.
 

There is however something that is troubling me, and that is the fact that you mention something about the Strategy Tester, but doing tests in the tester will not limit slippage at all as far as I know.

 
Fernando Carreiro:

It has just been pointed out to you in post #2 that it is NOT called "Pips" unless its a currency. If your broker is calling it "Pips", then they are naming it incorrectly or they are referring to something else. Make sure there is not a misinterpretation where the slippage control only applies to currencies and not to the SP500.

For SP500, it is called "Points" and 1 Point = $1.00. In this case it is a slippage of 0.49 Points ($0.49) and not 49 points, which makes it below the limit of 1 Point ($1).

Unless the broker is a Dealing Desk or Market Maker, it is usually NOT possible to limit your slippage at all, and you just have to accept the market conditions. So, make sure you are not misunderstanding the concept with your broker. If there is indeed a slippage control allowed by the broker, then they are a Dealing Desk / Market Maker broker.

Hola Fernando,

First of all guys, Thank you for taking your time to answer my questions!

after reseaching a bit on the site of my broker, I found a hidden tip regarding the limitation of maximum slippage that might help (although I didn't understand it to a 100%). it says:

"Pip - for avoidance of doubt, Volatilit Protection equates the pip to the tick size, i.e. the minimum increment of the price (e.g. 0.00001 for instruments quoted to the 5th place following the decimal point, 0.001 for the instruments quoted to the 3rd place following the decimal point etc)"

 If I understand this right, they use Pips OR POINTS (in the case of no currencies) ... so the 0.49 poits are the ones that would be limited if the've reached the 1 point?

Regarding the next question... maybe you are right and the limitation does not work in the strategy tester because I'm not sending a real request to the broker... it just works on the DEMO account and the real account. I'll check that later.

Thanks again

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