Slippage
and Latency
Execution quality depends on market depth, routing speed, and order type behavior. Slippage and latency metrics make those hidden costs measurable.
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Latency
Sources
Breakdown of delay points from terminal click to final fill.
Execution delay is cumulative. Each stage in the path from platform to liquidity venue adds milliseconds that can materially change fill outcomes during fast movement.
Latency Map
Median latency is useful, and tail latency explains most extreme fills during fast news windows.
Slippage
Scenarios
How different regimes and order types produce different fill outcomes.
Slippage probability rises when the order book thins or reprices rapidly. Session rollover, macro releases, and weekend gaps are common high-friction conditions.
Useful diagnostics classify slippage by order type and regime, then compare expected versus realized cost per trade cluster.
High-Friction Scenarios
Fast quote updates reduce available size at expected prices.
Liquidity providers rotate books and spreads widen temporarily.
Market reopens at a new price level with no tradable ticks in between.
Sparse depth causes larger price impact for moderate order sizes.
Frequently Asked Questions
What is slippage in forex execution?
Slippage is the difference between expected execution price and actual fill price. It appears when available liquidity changes between order submission and fill.
What is trading latency?
Latency is the delay between sending an order and receiving execution confirmation. It includes platform, network, broker, and liquidity-provider components.
Can slippage be positive and negative?
Both outcomes are possible. Positive slippage fills at a better price, while negative slippage fills at a worse price than expected.
Is this page financial advice?
This page explains execution mechanics for educational purposes. It does not provide personalized investment recommendations.
Continue Your Execution Science
Anatomy of an Order
Execution friction starts in the order-routing chain; this module maps each handoff.
Order Types & Stop Loss
Different order types produce different slippage behavior under volatility.
Backtest vs Forward Test
Include slippage and latency metrics to validate model assumptions in live conditions.
Trading Sessions & Liquidity
Session transitions and low-liquidity windows strongly affect fill quality.