Slippage is the difference between an execution price and a defined reference price. Choose the reference explicitly: the quote when you decided to trade, the quote when the order arrived, or a stop trigger can produce different measurements for the same fill.

Include Quantity in the Cost

Suppose you expect to buy 100 shares at $100 and the average fill is $100.15. Adverse slippage against that reference is $0.15 per share, or $15 in total. Ten identical entry fills would cost $150 relative to the reference, before exit differences and fees.

For a contract quoted in points, multiply the price difference by the currency value per point and the number of contracts. Do not treat a tick or a price change as a currency amount without that conversion.

Why the Fill Can Differ

Prices can move while an order is transmitted and processed. Displayed quantity may be insufficient, other orders may execute first, and a large order can receive multiple fills at different prices. Investor.gov explains order execution and routing.

Slippage can be favorable or adverse. Measure both rather than assuming every difference is a loss or that one market always stays within a particular number of ticks.

Choose the Tradeoff Deliberately

A buy limit caps the execution price and a sell limit sets its minimum, but either can remain unfilled. A stop-market prioritizes execution after its trigger and may fill beyond it. A stop-limit can leave the position open. Investor.gov's order guide distinguishes these mechanisms.

Using smaller orders or trading when liquidity is deeper may reduce some execution pressure, but conditions can deteriorate during news or a halt. Faster software or a nearby server cannot create liquidity or guarantee better fills.

Audit Your Own Execution

Log the reference quote and timestamp, order type, quantity, submission time, every fill, commissions and session. Compare similar order sizes and conditions. Separate the bid-ask spread from additional price movement so your cost model does not double count them.

Keep simulated evaluation fills separate from live brokerage executions. An evaluation provider may use a fill model rather than route your order to a market. Its results cannot establish the slippage you would receive in a personal live account.

Risk Disclaimer: Trading involves substantial risk of loss. Past performance is not indicative of future results. See our full risk disclaimer.