Glossary · Prop Firms
Slippage
Slippage is the difference between the price a trader expects on an order and the execution price actually filled by the market. It happens because of a small time lag between placing an order and executing it, during which prices can move. Slippage can be negative (a worse fill) or positive (a better fill).
Why it matters
Slippage can push both take-profit and stop-loss levels away from the level a trader planned, changing realized profit or loss on a trade. Prop firms generally treat slippage as a normal feature of simulated market conditions rather than a platform fault, so it typically will not be adjusted after the fact. Traders who ignore this risk unexpected stop-outs on evaluation accounts, particularly around news releases or rollover windows when liquidity drops and spreads widen.
Live data
Example
A trader sells one lot of EUR/USD with a take-profit and a stop-loss set at specific levels. A major economic release hits just as the order nears execution. The take-profit fills a few pips short of target, and the stop-loss fills a few pips beyond its level. The trade still closes in profit and risk is still managed, but both exits land at less favorable prices than planned because of the sudden volatility and reduced liquidity.
Common misconception
Traders often assume slippage only works against them, but it can just as easily produce a better-than-expected fill when the market moves in their favor between order placement and execution. Many also treat slippage as a rule violation or a platform glitch. In practice, most firms classify it as a natural market condition tied to liquidity gaps, volatility, or large lot sizes, and will not adjust results unless there is a total execution failure.
Related terms
See also
For a look at how one major prop firm frames execution and simulated market conditions in its rules, see the FTMO firm profile.
Sources
This mechanic is also described in broadly similar terms across other prop firms' trading rules pages.
Risk disclaimer: Trading carries a substantial risk of loss and is not suitable for everyone. Prop-firm evaluations charge fees and most traders do not pass. Nothing here is financial advice; figures can change, so verify current terms with the firm before purchasing.
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