what cause slippage on trading Forex?

Discussions about trading the Forex markets.
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oem7110
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what cause slippage on trading Forex?

Post by oem7110 »

I would like to know on what cause slippage on trading Forex.

Does anyone have any suggestions?
Thanks in advance for any suggestions
gunter
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Re: what cause slippage on trading Forex?

Post by gunter »

There could be several reasons. Bear in mind that there is no central exchange for forex markets.

You are much more dependant on your broker being honest and providing transparent pricing information. OANDA delivered guaranteed bid / ask pricing when I was trading there (2008-2010) which meant no slippage. I personally never experienced any slippage when I was hitting the bid or ask.

Dukascopy for instance offers a ECN platform. I used this to keep tabs on OANDA, i.e. mirror trades on a smaller account. There would be small variances between the two on execution, but nothing that would impact performance. I could have used either platform and had similar results.

That being said, OANDA did widen their spreads during news events. Generally my stops were far away and I was not affected, but occasionally I would get stopped out there and not at Dukascopy. Happened maybe once or twice during the entire period.

IMO, the biggest problem is not the slippage you might get on a forex account, but rather the fact that your broker needs to be honest. Trading equities / futures provides you with a much more transparent marketplace. That, combined with the fact that I could not properly latch onto any decent trends in 2010, caused me to close the accounts and rather focus on equities.
sinkpretend
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Re: what cause slippage on trading Forex?

Post by sinkpretend »

Slippage can be because of any reason some are known some are unknown because this is a very vast processing network no one can guarantee you a 100% protection against the slippage but still there are some of the tactics you can follow to get rid of it or to avoid it. First of all find some broker who is the best and get the trading details, a good broker always have some modern tools that will help you monitor and analyze all the deals happening then there are some sites which are basically for slippage and performances.
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