Lesson 03: Execution, Slippage and Requotes

You click at 1.0800 and the fill comes back at 1.0803. Was that theft, or Tuesday? The answer is almost always Tuesday — but you cannot tell the difference without knowing what happens in the fraction of a second between the click and the fill.

The path an order takes

The quote on your screen is not a price you can transact at. It is the last price your broker sent you, which was itself derived from what its liquidity providers were showing a moment before that. By the time your click arrives, some of it is already history.

The quote is pushed to you. Your platform shows the broker's current bid and ask.
You click. The order leaves your machine and travels to the broker's server — anywhere from a few milliseconds on a good connection to a few hundred on a bad one.
The broker decides. Either it fills you itself, or it routes the order to a liquidity provider.
The market answers. The order is matched at whatever is actually available at that instant.
The confirmation comes back, carrying the real fill price.

Every step takes time, and the price is free to move throughout. On a quiet EUR/USD afternoon it usually does not move enough to notice. Around a data release it can move several pips inside that window.

Note

This is why "the price was there, I saw it" is not an argument. What you saw was a snapshot with a delay baked in. The only price that existed for your order is the one it met on arrival.

Slippage, positive and negative

Slippage is the difference between the price you expected and the price you got. It runs in both directions, and a broker that only ever slips you one way is telling you something.

	Buying	Selling
Negative slippage	Filled higher than expected	Filled lower than expected
Positive slippage	Filled lower than expected	Filled higher than expected

Size it in money rather than pips and it stops being abstract. Half a pip of slippage on 0.5 lots of EUR/USD is $2.50 — noise on a 35-pip trade. The same half pip on 20 lots is $100, which is why execution quality is a bigger deal for large accounts than small ones.

Where slippage is normal and unavoidable

Stop orders. A stop becomes a market order the moment it triggers. It fills at whatever is available, which by definition is the price that just moved against you.
News releases. In the seconds around a major number, the book empties and the price gaps between levels. Several pips is ordinary here.
The Sunday open, which prices in a weekend's worth of news in one jump.
Thin hours, where a large order walks through a shallow book.

Where it is a problem

It is one-directional. Real market movement is symmetric. If you never receive positive slippage, you are not seeing the market — you are seeing a policy.
It happens on limit orders in the wrong direction. A limit order is a promise about the worst price you will accept. Being filled worse than your limit is not slippage; it is a broken order type.
It appears only on winning trades, or only when your size goes up.

Good to know

Keep the expected and filled price for every trade in your journal. Thirty trades is enough to see whether the distribution is centred near zero or sits stubbornly on one side — and that is evidence, where a single bad fill is only a feeling.

Requotes and when they appear

A requote is the broker refusing your order and offering a different price instead. You get a dialog: the price has changed, accept or cancel.

It is a different mechanism from slippage. Slippage fills you at a worse price; a requote does not fill you at all until you agree again — and in the seconds you spend deciding, the move you were trying to catch is usually over.

Requotes are a feature of dealing-desk execution, where the broker quotes you a price and reserves the right to decline it. On market-execution accounts they do not exist: the order is filled at whatever is available, which is slippage instead.

Caution

Frequent requotes on a liquid pair in liquid hours is one of the clearer bad signs in this lesson. Occasional requotes during a central bank announcement are ordinary. Requotes every time you trade a major in the London session are not.

What normal looks like, with numbers

Rough reference points for a retail account on a major pair, trading a size the market does not notice:

Condition	Expected slippage	Verdict
Market order, EUR/USD, London hours	0 to 0.5 pips, both directions	Normal
Market order, thin Asian hours	0.5 to 2 pips	Normal
Stop triggered in a fast move	1 to 5 pips	Normal
Stop triggered on a major data release	5 to 30 pips	Normal, and the reason to size for it
Any order, always against you	Any amount	Investigate
Limit filled worse than the limit	Any amount	Wrong — raise it

Setting slippage tolerance

Most platforms let you cap the deviation you will accept. Setting it to zero feels safe and is not: an order that cannot be filled within zero pips simply does not get filled, and an unfilled entry is an inconvenience while an unfilled exit is an open position you thought you had closed.

On entries, a tolerance of one to three pips on a major is reasonable. If the market has moved further than that, the setup you wanted is gone anyway.
On exits and stops, allow more, or leave it uncapped. Getting out at a bad price beats not getting out.

Note

Slippage on stops is a risk-sizing problem, not an execution problem. If a 30-pip gap through your stop would hurt, the position is too large — that is the argument lesson 8 of Track 1 makes in money terms, and Track 5 makes properly.

Key takeaways

Your quote is a delayed snapshot; the only price your order ever meets is the one available on arrival.
Slippage should run both ways. One-directional slippage, or a limit filled worse than its limit, is a red flag.
Requotes belong to dealing-desk execution; frequent requotes on majors in liquid hours is a reason to look elsewhere.
Cap deviation on entries, not on exits — an unfilled exit is a position you did not know you still had.

Execution, Slippage and Requotes

By the end of this lesson

Before this lesson