In short
Orders go through an automated process on a market execution basis, with no requotes, filled at the best available price at the moment they are processed.
The market execution model
Your order is filled at the best price available in the market at the moment it is processed.
- No requotes. Your order is never sent back for you to approve a different price. It is executed at the current market price.
- Possible slippage. Because prices move continuously, the execution price can differ slightly from the one you saw when you selected buy or sell. It can go either way.
The life of your order
- You submit an order in MetaTrader 5, either a market order or a pending one.
- The order reaches the trading server, where margin requirements are checked.
- It is matched against the best available price from the liquidity providers.
- The fill is confirmed back to your platform, usually within milliseconds.
Why slippage happens
Slippage is normal and is not a fault. It happens for two market reasons.
| Cause | What it is | Why it matters |
|---|---|---|
| High volatility | The price is moving up and down very quickly, often around major economic news | The price changes so fast that your order fills at the best price available after the one you saw |
| Low liquidity | There are not enough buyers or sellers active in that instrument at that moment | To fill your order, the platform must match you at the next available price level |
| Type | What it means | Outcome |
|---|---|---|
| Negative slippage | You fill slightly worse than expected | Reduces profit, or increases loss |
| Positive slippage | You fill slightly better than expected | Increases profit |
| No slippage | You get the price you expected | The desired outcome |
How to reduce it
- Avoid trading in the seconds around major news. Markets are most volatile right after an important release. Waiting for the price to settle is usually safer.
- Trade during busy hours. More participants means higher liquidity and less chance of significant slippage. For currencies, that is typically the London and New York overlap.
What else affects execution
- Volatility. Fast markets increase the chance of slippage.
- Liquidity. Around market open and close, holidays and news, fewer participants can mean wider spreads and larger price jumps.
- Order type. Stop orders become market orders when triggered, so they can fill with slippage. Limit orders fill at your price or better.
Speed can also vary slightly with your own internet connection and with market conditions during peak volatility.