Forex market slippage

[asimpleplan]

Hi, I'm starting out on trading the forex market. I checked this site: http://www.ig.com/uk/forex-trading

..and it lists the % of orders that get filled without slippage.

The % rate is nearly always about 98.XX %

What do they really mean by this?

Do they mean you'll get filled at 'near enough' to your attempted close position?

Obviously, a sudden shift in the market and not being allowed to close a position could easily wipe out your trading account?

 

[Rhody Trader]

The % rate is nearly always about 98.XX %

What do they really mean by this?

Do they mean you'll get filled at 'near enough' to your attempted close position?

They mean the order was filled at the order price. For example, if your stop was at 101.50 it was filled at 101.50. Slippage would be anything other than 101.50 - better or worse.

 

[wackypete2]

Obviously, a sudden shift in the market and not being allowed to close a position could easily wipe out your trading account?

Then you are over leveraging.

Peter

 

[asimpleplan]

Then you are over leveraging.

Peter

No, let's suppose you take a position in the market with a set Stop Loss, but the market crashes through the SL, and your order not filled, then, in theory your account will be in loss. So, the question is at what point is the loss settled if the market keeps moving against your position?

I assume that a smart trader would ONLY keep enough money in his trading account to maintain a trading position i.e. the one above with a set stop loss.

I read this recently in a book on trading FX:

(Rarely, if ever, will a broker guarantee stop losses around the release of
economic reports or other volatile events.)

 

[Rhody Trader]

No, let's suppose you take a position in the market with a set Stop Loss, but the market crashes through the SL, and your order not filled, then, in theory your account will be in loss. So, the question is at what point is the loss settled if the market keeps moving against your position?

A stop order becomes a market order once triggered. That means your trade would be filled at the next available price.

I assume that a smart trader would ONLY keep enough money in his trading account to maintain a trading position i.e. the one above with a set stop loss.

I read this recently in a book on trading FX:

Unless your broker guarantees you can't go into a negative balance (check the fine print), if the market goes sharply against you enough to blow through your stop and the automated margin call stop-out, then you'll own the difference.

 

[gerryg]

Hi, I'm starting out on trading the forex market. I checked this site: http://www.ig.com/uk/forex-trading

..and it lists the % of orders that get filled without slippage.

The % rate is nearly always about 98.XX %

What do they really mean by this?

Do they mean you'll get filled at 'near enough' to your attempted close position?

Obviously, a sudden shift in the market and not being allowed to close a position could easily wipe out your trading account?

Too far-fetched I guess. Only on NFP I think 90% of orders filled with 5-10 pip slippage if not more.

 

[asimpleplan]

Too far-fetched I guess. Only on NFP I think 90% of orders filled with 5-10 pip slippage if not more.

What? In the forex market, trading the US$/GBP, or the US$/Eur?

I mean, why would there be much slippage in the markets with the greatest liquidity? 5-10 pips is a lot, and would be disastrous for a scalper.

 

[gerryg]

What? In the forex market, trading the US$/GBP, or the US$/Eur?

I mean, why would there be much slippage in the markets with the greatest liquidity? 5-10 pips is a lot, and would be disastrous for a scalper.

Have you traded non farm payrolls? During this crazy volatility slippage, off-quotes, spread widening is a common thing. I would advice you to avoid trading during this time.

 

[forker]

Have you traded non farm payrolls? During this crazy volatility slippage, off-quotes, spread widening is a common thing. I would advice you to avoid trading during this time.

Not unless the data being released is a nobrainer.