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Welcome to OptionRally Academy, I'm Amy Anderson with the Term of the day.
Today we are going to talk about Slippage.
Slippage is the difference between the expected filled price of the trader and the actual
price filled. In the forex market, this may be caused by an ineffective broker, increased
liquidity, and fast markets. Although the forex market is very liquid and because of
this there are limited amounts of slippage. Slippage often occurs when volatility, (perhaps
due to market events), makes an order at a specific price impossible to execute. In this
situation, most forex dealers will execute the trade at the next best price. When stock
trading this often occurs when there is a change in spread. In this situation, a market
order placed by the trader may get executed at a worse than expected price.
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