Home › Market News › What Slippage Means in Trading (Beginner’s Guide)
You line up the perfect trade. You click buy and then realize the price where your trade actually started (your entry price) isn’t what you expected. Welcome to slippage, one of those trading realities every beginner meets sooner or later.
It’s a term every trader hears about, but few beginners truly understand. Don’t worry, it’s not a platform glitch, and it’s not something you did wrong.
Let’s unpack what’s really going on, and how you can stay in control when it does.
Slippage is the difference between the price you wanted (your expected price) and the price you actually got when your trade went through.
Think of it like using a ride-share app after a big game. One moment, the fare says $25. A few seconds later (before you can confirm), it jumps to $30 because demand just spiked. You didn’t do anything wrong; prices just shifted faster (that’s market volatility) than you could react.
That slight timing difference is what slippage is like in trading. You clicked “buy,” but by the time your order reached the exchange, the market had already moved. You didn’t do anything wrong. That’s just how fast the markets can be.
When you place an order, you’re telling the market what you want to do: buy or sell a contract, and under what conditions. Once that order goes through and someone on the other side takes the trade, it becomes a fill, which is the actual price where your trade was completed. Sometimes you get a slightly better price (that’s positive slippage) and sometimes a slightly worse price (negative slippage). Either way, it’s a normal part of trading and something every trader deals with.
To fully understand slippage, you first need to know how stop and limit orders work. Every order you place tells the market how you want your trade executed. Some orders prioritize speed, getting you in or out right now. Others prioritize price, filling only when a specific number is reached.
That balance between speed and price control is where slippage comes in. Once you understand that trade-off, slippage starts to make sense. If you want a deeper dive into how different order types work and when to use them, read “Order Entries: Market, Limit, Stop, and Trailing Stops Explained.”
Now, let’s look at how it plays out with stop and limit orders.
Stop Orders: Fast but Flexible on Price
A stop order tells the market to fill your trade as soon as price hits your stop level. When it triggers, it becomes a market order, meaning it fills at the next available price, not necessarily the one you set.
Stop orders give you speed and protection, but not price control. They’re designed to get you out quickly if a trade turns against you, or in fast if momentum is moving your way.
Think of it like setting a spending alert for a flight. You tell the airline, “Buy the ticket if it drops to $300.” But by the time your alert triggers and the system books it, the price has already jumped to $308. You still get your seat, just at a slightly higher cost. That price difference is your slippage.
While stop-loss orders protect you from missing a move or taking a big loss, they can also lead to slippage when the market moves fast. The trade-off: you’ll almost always get filled, just not always at your exact price.
Limit Orders: Controlled but Not Guaranteed
A limit order is the opposite. It says, “I’ll trade, but only if I can get this price or better.”
Limit orders give you control over your price, but they don’t guarantee you’ll get in. You might watch a move take off without you, and that’s okay. Sometimes missing a trade is better than forcing one.
Think of it like waiting for that same flight, but this time you set a rule: “Book it only if the ticket drops to $300.” If it never does, you don’t fly. You save your money, but you also miss the trip. That’s the trade-off. It’s perfect price control, but there’s no guarantee you’ll be on board when the market takes off.
So while limit orders help you avoid slippage, they can also mean missed opportunities. That’s the balance every trader learns to manage.
Because markets move. Constantly.
Between the time you place your order and when it reaches the exchange, the market might move a few ticks (the smallest price changes in a futures contract). That movement means the price you wanted may no longer be available.
It’s not that your order was ignored. It’s that demand shifted in real time. When lots of traders try to buy or sell at once, prices adjust to match that demand. If your order doesn’t reach the front of the line fast enough, you get filled at the next available price instead.
Slippage is most common when:
It’s the price of doing business in a real, moving market.
You can’t completely avoid slippage, but you can learn to manage it like a pro:
They give you control over price and help minimize slippage. Just remember, they might not always fill.
2. Expect Slippage on Stops
Stops are your safety net. They may fill a few ticks off your target, but that’s better than blowing up your account.
3. Trade During Active Hours
When more traders are active, there’s more liquidity (more buyers and sellers), and fills tend to be smoother.
4. Avoid Big News Until You’re Ready
Events like Consumer Price Index (CPI) or Federal Open Market Committee (FOMC) can send prices flying. Sit those out until you’ve built more experience.
5. Stay Small
Large orders can push through multiple price levels before they fill, increasing slippage. Start with smaller positions until you understand how the market moves.
Slippage teaches you something important: you can’t control the markets. Prices change, orders move, and the only thing you can control is how you respond.
That’s why stop and limit orders exist. One protects you from major losses, the other helps you stay disciplined on price. Once you understand how they behave, slippage stops feeling random. You’ll know why it happens, when to expect it, and how to plan around it.
It’s not about avoiding it altogether. It’s about trading with awareness and structure, so those small differences don’t throw you off your trading plan.
Reading about slippage is one thing. Seeing it happen in real time and learning how to manage it is another.
That’s why practicing in a simulated environment like Topstep’s Trading Combine is so valuable. You get real market experience, including slippage. It’s the safest way to build consistency, confidence, and discipline.
By the time you move into an Express Funded Account (Topstep’s next-level simulated account where you can earn real payouts for consistent performance), you’ll start noticing how orders behave and when slippage can show up. Over time, that awareness helps you trade with more confidence and control.
Slippage happens when price movements occur between the time you place an order and when it’s executed. Fast market conditions or low liquidity can lead to slippage by the time the order reaches the exchange.
Yes. Limit orders specify the minimum or maximum price you’re willing to accept, which gives you price control. However, if the market doesn’t reach your limit, your order may not fill.
Yes. Slippage affects all trading platforms because it depends on how fast orders are processed and how quickly markets move. Even in simulated environments like Topstep’s Trading Combine, you’ll experience slippage during live market conditions. This helps you learn how order types, market participants, and liquidity impact your actual fill price compared to your expected price.
Trading in the Combine gives you a realistic feel for how slippage works, so when you move into an Express Funded Account, you’ll already know how to manage it effectively using smart order placement, timing, and risk control.
