Slippage — The difference between the price a trader expected and the price a trade actually filled at.
How slippage works in prop trading
Slippage happens whenever the market moves between your decision and your fill, or when your order is larger than the size resting at the touch. Market orders and stop orders are exposed to it by design — both take whatever price is available — while limit orders are not, at the cost of possibly not filling at all.
It is a bigger deal on a prop account than on a retail one for a simple arithmetic reason. A trader taking four trades a day with one tick of slippage on entry and exit is spending $100 a day on an E-mini, which is 5% of a $2,000 drawdown allowance every session before the strategy has done anything. Traders often blame the firm's execution when the real cause is the product, the session, or using market orders where limits would do.
Key points
- Market and stop orders accept slippage by design; limit orders trade fill certainty for price certainty.
- Worst around scheduled releases, at the open and close, and in thin sessions.
- On a tight prop drawdown, routine slippage is a measurable share of the risk budget.
- Simulated funded environments can show different slippage from the evaluation platform — worth comparing.
Example
Four round turns a day on one E-mini with one tick of slippage each way costs $100 a session — 5% of a $2,000 drawdown allowance before commissions.
Also known as
- fill slippage
- execution slippage
- price slippage
Frequently asked questions
Why do I get slippage on my prop firm account?
Usually because of the order type, the product, or the session rather than the firm. Market and stop orders fill at whatever is available, and depth thins outside US cash hours and around news. Trading the expiring contract during roll week is another common cause.
How do I reduce slippage?
Use limit orders where your strategy tolerates a missed fill, trade the liquid front month during liquid hours, avoid the seconds either side of high-impact releases, and size within the depth resting at the touch rather than sweeping several levels.
Put this into practice
Slippage is described here as a plain-language educational definition. Firms, platforms, and account programs may apply different conditions or calculations. Verify the current official terms before using this definition to make an account decision.