Bid, ask and slippage: why your order fills at a different price

Every currency quote has two prices. Understanding which one applies to your order explains several things that confuse new traders.

Bid and ask

• Bid: the price at which you can sell.
• Ask: the price at which you can buy. It is always higher than the bid.

The gap between them is the spread. If EUR/USD shows 1.15000 / 1.15008, you sell at 1.15000 and buy at 1.15008.

Which price applies when

• A buy position opens at the ask and closes at the bid.
• A sell position opens at the bid and closes at the ask.

That is why a trade shows a small loss the moment it opens: you would have to close it at the other side of the spread.

Why a stop can trigger when the chart didn't reach it

On MetaTrader and many other platforms, charts are drawn using the bid price. A sell position's stop-loss is triggered by the ask price, because that is where the position would be closed.

If the spread widens suddenly, for example at the daily rollover or just before a data release, the ask can reach your stop even though the bid line on the chart stayed below it. The same logic applies to take-profit orders on sell positions.

What slippage is

Slippage is the difference between the price you expected and the price you actually got. It happens because a market order fills at the best available price when it reaches the market, and in a fast market that price may have moved.

Slippage can go against you or in your favour, depending on the broker's execution policy and the direction of the move.

Common causes:

• Major data releases and central bank decisions
• Thin liquidity outside the main sessions or on holidays
• The market reopening after a weekend with a gap
• Very large orders relative to available liquidity

Stop orders and slippage

A stop-loss becomes a market order once it is triggered. It guarantees an exit, not a price. In a gap or a fast market, it fills at the next available price, which can be well beyond the stop level.

Some brokers offer guaranteed stop-loss orders for a fee or a wider spread, which fill at exactly the stop price regardless of gaps. Availability depends on the broker and the market.

Reducing slippage

• Avoid entering with market orders in the seconds around high-impact releases.
• Use limit orders when the exact entry price matters more than being filled.
• Check your broker's order execution policy, which describes how orders are filled.
• Keep position sizes small enough that slippage on a stop doesn't break your risk plan; see position sizing.