Definition
Slippage occurs when a trade is executed at a price different from the one requested. In the MT5 execution model, slippage is an inherent characteristic of market orders -- the price can move between order submission and execution, especially in fast-moving markets.
Slippage is measured in pips or points and can be either positive (trader receives a better price) or negative (trader receives a worse price). In a fair NDD environment, slippage should be approximately symmetrical -- meaning positive and negative slippage occur with roughly equal frequency.
Formula
Slippage = Fill Price - Requested PriceNegative value = negative slippage (worse for trader). Positive value = positive slippage (better for trader). Measured in pips.
Asymmetry = |Avg Negative Slippage| / Avg Positive SlippageA ratio of 1.0 indicates perfectly symmetrical slippage. Values above 1.5 suggest the broker may be engaging in asymmetric price improvement practices.
Positive vs Negative Slippage
Positive Slippage
The order fills at a better price than requested. This happens when the market moves in the trader's favor during execution. Genuine NDD brokers pass positive slippage through to the client.
Negative Slippage
The order fills at a worse price than requested. Some brokers apply asymmetric slippage -- passing negative slippage to traders while keeping positive slippage. This is a key red flag.
Benchmark Ranges
| Rating | Range | Assessment |
|---|---|---|
| 0.0 - 0.2 pip | 0.0 -- 0.2 pip avg | excellent |
| 0.2 - 0.5 pip | 0.2 -- 0.5 pip avg | good |
| 0.5 - 1.0 pip | 0.5 -- 1.0 pip avg | fair |
| > 1.0 pip | Over 1.0 pip avg | poor |
These ranges represent average absolute slippage across all orders. The symmetry ratio is equally important -- a broker with 0.3 pip average slippage but a 2.0 asymmetry ratio is worse than one with 0.5 pip average but 1.1 ratio.
Slippage Distribution
Slippage distribution across our broker sample. A healthy distribution is centered near zero with symmetric tails:
Influencing Factors
Execution Speed
Faster execution means less time for price to move, resulting in less slippage overall.
Market Volatility
During news events and session opens, larger price gaps increase slippage magnitude.
Liquidity Depth
Thin order books at certain price levels cause larger slippage for bigger orders.
Broker Policy
Some brokers set maximum slippage thresholds. Others apply asymmetric handling of positive vs negative slippage.