Direct answer
Slippage questions are the set of clarifications you ask (or the checks you perform) to understand whether a forex execution result differed from what was expected when the order was placed. In practice, they help you separate the idea of “expected price” from the “actual fill,” and identify what conditions could cause the difference.
Mechanism and definition
In forex trading, an order is placed based on information available at that moment (often a quoted or estimated price). The trade is later executed, and the market may have moved in the meantime. If the executed price is worse than expected for a buy (higher) or for a sell (lower), the difference is commonly called slippage.
Slippage questions typically ask about:
- The expected reference: the quote or price shown when you submitted the order.
- The actual execution: the fill price reported afterward.
- The timing: how much time passed between order submission and execution (or between quote update and fill).
- The measurement method: whether you compare before/after spreads, include commissions, or calculate slippage only from price.
A simple model is: slippage = actual fill price − expected reference price, using a clear definition of which price you treat as “expected.” This matters because different sources may use different reference points (quote mid, bid/ask, or last traded), which can change the calculated number.
Evidence or example (with stated assumptions)
Assume you place a market order when the platform shows an available buying price of 1.1000 for a pair, and the order is filled at 1.0996. If you define the expected reference as the shown buy price, then the price difference is 1.0996 − 1.1000 = −0.0004 (a worse-than-expected execution for the buyer).
If you instead define expected as the mid price at that moment, the result can differ even if the fill is identical. That is why slippage questions often include: “Which exact reference price am I comparing against?” and “Does the calculation include fees or only the execution price?”
Limitations and risks (what can go wrong)
Slippage is not a single fixed property. Observed outcomes depend on variable conditions such as liquidity, volatility, and execution delays. Because of that:
- A “small slippage” observation in one moment does not imply small slippage in other moments.
- Historical patterns do not reliably predict future executions.
- Reported results can differ depending on how timestamps, reference prices, spreads, and fees are recorded by different systems.
One material failure mode is mixing definitions—calculating slippage using one reference (for example, a quote) while comparing against results computed using another reference (for example, a mid price or a different bid/ask). Another limitation is incomplete records: without order ticket details (expected reference) and fill details (actual execution), you may not be able to verify slippage accurately.
Verification or next question
To independently verify whether slippage occurred and quantify it consistently, compare the order ticket’s expected reference price (and the method it uses) with the execution fill price and its timestamp. Then restate your slippage calculation using the same reference definition every time.
A next useful question is: “What exactly is the platform’s reference price for this order type?” If you can answer that, you can make comparisons internally consistent—even when market conditions vary.