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Diamond Ashiegbu
729
Diamond Ashiegbu 2015.05.28 02:02 

1. SLIPPAGE:

Explain to me the way I will understand it?

Ronnie Mansolillo
4921
Ronnie Mansolillo 2015.05.28 16:53  
Diamond Ashiegbu:

1. SLIPPAGE:

Explain to me the way I will understand it?


With regard to futures contracts as well as other financial instruments, slippage is the difference between where the computer signaled the entry and exit for a trade and where actual clients, with actual money, entered and exited the market using the computer’s signals.[1] Market-impacted, liquidity, and frictional costs may also contribute.

Algorithmic trading is often used to reduce slippage, and algorithms can be backtested on past data to see the effects of slippage, but it’s impossible to eliminate entirely.[2]

Futures contract - Wikipedia, the free encyclopedia
Futures contract - Wikipedia, the free encyclopedia
  • en.wikipedia.org
In finance, a futures contract (more colloquially, futures) is a contract between two parties to buy or sell an asset for a price agreed upon today (the futures price) with delivery and payment occurring at a future point, the delivery date. Because it is a function of an underlying asset, a futures contract is considered a derivative product...
Diamond Ashiegbu
729
Diamond Ashiegbu 2015.05.29 19:27  
Ronnie Mansolillo:

With regard to futures contracts as well as other financial instruments, slippage is the difference between where the computer signaled the entry and exit for a trade and where actual clients, with actual money, entered and exited the market using the computer’s signals.[1] Market-impacted, liquidity, and frictional costs may also contribute.

Algorithmic trading is often used to reduce slippage, and algorithms can be backtested on past data to see the effects of slippage, but it’s impossible to eliminate entirely.[2]

Thank you my good friend.
Diamond Ashiegbu
729
Diamond Ashiegbu 2015.05.29 19:29  
How can one avoid lost of equity in trading forex?
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