● Platinum surpasses $2,300
● Gold hits $4,500
● US growth figures exceed expectations
Precious metals push higher
It may have taken seventeen years, but platinum has finally beaten its long-standing record high established back in 2008, pushing beyond $2,300 per ounce as of this morning. The precious metal has gained a staggering $700 over the last two weeks and is now up 160% since the start of the year, beating the rallies in gold and silver. Speaking of which, gold ventured over the $4,500 mark earlier today, exploring new territory and adding another significant milestone to this year’s accomplishments. Silver meanwhile blasted through $70 per ounce yesterday, closing the day over $71 per ounce and pushing even higher this morning. Precious metals have exceeded all expectations this year, and continue to surprise even the most fervent of gold bugs. With one week to go before the end of the year, the question on everyone’s mind is how much higher metals can go in 2025.
Surprise US growth figures
The latest US GDP figures, published yesterday, revealed that the American economy grew by 4.3% in the third quarter – the fastest rate of growth in two years. The acceleration was largely driven by consumer spending, but also by a smaller trade deficit due to an increase in US exports. The data thoroughly outpaced economists’ predictions of 3.3% and came as a pleasant surprise to US stocks, pushing the S&P 500 to a fresh record high. The latest figures carried over to the crude oil markets, which are in the midst of a rebound following last week’s lows. The Brent benchmark crept back over $62 a barrel yesterday, while WTI managed to reclaim $58.
#Platinum #Gold #SPX
If you’ve been trading forex for more than five minutes, chances are you’ve stumbled across the MACD. Short for Moving Average Convergence Divergence, this indicator has earned a spot on the charts of countless traders, from wide-eyed beginners to seasoned pros with multiple screens. Why? Because the MACD is like the most applicable of indicators, it can show you trend direction, momentum, and potential reversal points, all without looking overly complicated.
But like most things in forex, it’s not a magic wand. The MACD can be incredibly powerful when used properly, but it also has its quirks and limitations. Some traders swear by it, others think it lags behind price action, and a few just throw it on their charts because it looks cool (no judgment intended).
In this article, we’ll break down what the MACD is, how it actually works, and why traders use it. We’ll also look at its advantages, disadvantages, the timeframes it tends to shine on, and which currency pairs give it the most reliable signals. By the end, you’ll have a clear, practical understanding of how to put this indicator to work in your own trading.What Is the MACD?
The MACD (that’s Moving Average Convergence Divergence for when you’re trying to sound impressive in trading forums) is one of the most widely used indicators in forex. At its core, it’s built on a simple concept: moving averages. Trader’s love moving averages because they smooth out price action and make the chaotic forex market look slightly less like a busy heart monitor.
Here’s what makes up the MACD:
● The MACD Line – This is the difference between two Exponential Moving Averages (EMAs), typically the 12-period EMA and the 26-period EMA. If you’re not a fan of math, don’t worry-your trading platform does the heavy lifting.
● The Signal Line – A 9-period EMA of the MACD line. When the MACD line crosses above this one, it suggests bullish momentum. Cross below? Bearish momentum. Traders love this bit because it feels like the indicator is whispering buy/sell secrets directly into their ears.
● The Histogram – This little bar chart shows the distance between the MACD line and the signal line. When the bars are growing, momentum is building; when they shrink, momentum is fading. Think of it as a mood indicator for the market.
What does this all mean? In plain English: the MACD helps you identify trend direction, momentum, and possible reversals. When the fast-moving EMA (short-term price action) pulls away from the slower EMA (long-term price action), the indicator shows momentum building. When they start converging, it’s a clue the trend could be running out of steam.
Traders typically look for three main signals:
1. Signal line crossovers – MACD line crossing above/below the signal line.
2. Zero-line crossovers – MACD moving above or below zero, hinting at trend direction.
3. Divergence – When price and MACD move in opposite directions (often a warning sign of a potential reversal).
In short: the MACD is both a trend-following tool and a momentum indicator. That’s why it’s in almost every trader’s toolbox, right next to caffeine and questionable levels of optimism.How Does the MACD Work in Forex Trading?
Now that we know what the MACD is, let’s talk about how it actually earns its keep on your trading screen. Spoiler alert: it doesn’t predict the future (sorry to disappoint), but it does a pretty solid job of highlighting momentum shifts and trend changes.
Here’s how traders typically use it:
1. Signal Line Crossovers
When the MACD line crosses above the signal line, traders interpret it as bullish momentum-basically, “hey, buyers are waking up.” When it crosses below, it suggests bearish momentum-aka, “sellers are back in charge.” Of course, not every crossover means instant profit; sometimes it’s just the market trolling you.
2. Zero Line Crossovers
When the MACD moves above zero, it’s a sign the short-term EMA is stronger than the long-term EMA-momentum is bullish. When it dips below zero, momentum is bearish. This is great for spotting trend direction, but if you expect instant riches, you might want to lower those expectations (and maybe stop following those Instagram “forex gurus”).
3. Divergence
This one gets traders really excited. If the price is making higher highs, but the MACD is making lower highs, that’s bearish divergence-a warning sign the uptrend might be running out of steam. Flip it the other way (lower lows in price, higher lows in MACD) and you’ve got bullish divergence. Traders call it a “heads up,” but sometimes it’s more like a “heads up, but don’t mortgage your house on this signal.”
Putting It Into Practice
Let’s say you’re looking at EUR/USD on the 4H chart. Price is climbing steadily, the MACD line crosses above the signal line, and the histogram bars are growing momentum is building. A trader might enter a long trade, but a smart trader (read: not the one blowing accounts weekly) would also check support/resistance levels or maybe confirm with another indicator.
Because here’s the truth: the MACD is powerful, but it’s not meant to be used in isolation. Think of it as a reliable wingman. It’s there to support your decisions, not make them for you.Advantages of Using the MACD Indicator
Despite its quirks, the MACD has earned a place in nearly every forex trader’s toolkit. Here’s why:
1. Simplicity (Kind of…)
Once you understand the components-MACD line, signal line, histogram-it’s surprisingly easy to read. Your trading platform does the math, so you can pretend you’re a financial genius without actually crunching numbers.
2. Works Well in Trending Markets
The MACD shines when there’s a clear trend. Uptrend? Momentum signals build, helping you ride the wave. Downtrend? It warns you when sellers are gaining strength. In a perfect world, it’s like having a friend who whispers, “Yep, this trend’s got legs.”
3. Spotting Potential Reversals
Divergence signals (when price and MACD disagree) can give early warnings of reversals. Sure, it doesn’t come with a crystal ball, but spotting a trend losing momentum before it collapses is better than being blindsided.
4. Entry and Exit Confirmation
The MACD can help confirm your trade decisions. Whether you’re entering a trade after spotting a breakout or exiting before momentum fades, the MACD’s signals give you a little extra confidence. Think of it as the trading equivalent of double-checking your parachute before jumping.
5. Flexible Across Timeframes
From 5-minute scalps to daily swing trades, the MACD adapts to different trading styles. Just adjust your settings, and you’re good to go.
In short: the MACD is easy to use, versatile, and capable of providing meaningful insight-especially for traders who pair it with price action or other indicators. It won’t make you rich on its own, but it’s a tool that can help you make smarter decisions and avoid some obvious mistakes.Disadvantages of the MACD
As much as traders love the MACD, it’s far from perfect. Here’s what you need to watch out for:
1. Lagging Indicator
Because the MACD is based on moving averages, it reacts to price instead of predicting it. In plain English: it’s always a few steps behind the market. If you’re hoping it’ll shout, “buy now!” before the move, you might be disappointed. Think of it as your friend who’s always fashionably late-helpful, but not first to the party.
2. False Signals in Sideways Markets
The MACD works best in trends, but in choppy or sideways markets, it can throw out signal after signal, none of which actually lead anywhere. Traders sometimes call this “whipsawing”-when the indicator seems like it’s saying one thing, but the market is actually just messing with you.
3. Can’t Predict Price Alone
The MACD tells you about momentum and trend, but it won’t give you exact entry or exit points. Relying solely on it is like driving with only your rearview mirror-it’s informative, but dangerous if that’s all you’re looking at.
4. Needs Confirmation
Because it lags and can produce false signals, the MACD is best used alongside other tools-support/resistance, candlestick patterns, or even other indicators. Ignoring this can leave you nodding at the charts while your account silently cries in the corner.
5. Sensitive to Your Settings
Adjusting the EMAs or signal line can dramatically change what the MACD tells you. Some traders swear by the default 12, 26, 9 setups; others tweak it obsessively. Either way, you can’t just slap it on a chart and expect perfection.
In short, the MACD is great-but only if you know its limitations. Ignore them, and you might feel like a participant in a very expensive guessing game.Best Timeframes for the MACD in Forex
Not all timeframes are created equal when it comes to the MACD. Using the right one can mean the difference between a signal that actually works and one that makes you want to throw your laptop out the window.
Short-Term Timeframes (5M–15M)
Scalpers love these tiny charts because they can catch quick moves. The MACD here is fast-moving and produces lots of signals-sometimes too many. You’ll get a lot of excitement… and a lot of false alarms. If your heart rate spikes every time a crossover happens, maybe stick to coffee instead of 5-minute charts.
Medium Timeframes (1H–4H)
These charts are sweet spots for swing traders. The MACD signals are more reliable than in ultra-short timeframes yet still frequent enough to provide opportunities. You get a clearer picture of the trend, and fewer instances of the “market trolling you” feeling.
Longer Timeframes (Daily)
Daily charts are where the MACD really shines for spotting larger trends. Signals are slower, but generally more trustworthy. Patience is key here, though-this isn’t for the trader who needs instant gratification. You might wait a few days for a signal, but when it comes, it’s usually meaningful.
Tips for Using Timeframes
● Align signals on smaller timeframes with trends on higher timeframes. For example, if the daily MACD is bullish, favour long trades on the 1H chart.
● Avoid relying on the MACD in tiny charts if you can’t stomach a lot of false signals.
● Remember: the indicator doesn’t know what news is about to drop, so sudden spikes can make even the most solid setups look like a sick prank.
In short, the MACD is versatile, but picking the right timeframe is crucial. Too short, and it whipsaws; too long, and you miss opportunities. The trick is finding a balance that suits your trading style-and your nerves.Best Currency Pairs to Use The MACD On
The MACD doesn’t treat every currency pair equally. Some pairs love it, others… not so much. Knowing where it works best can save you a lot of frustration (and possibly a few lost trades).
1. Major Pairs Are Your Friends
Pairs like majors, EUR/USD, GBP/USD, USD/JPY, and USD/CHF are highly liquid and tend to have smoother, more predictable trends. This makes the MACD signals more reliable and easier to interpret. If you’re trading these, the indicator is like that dependable friend who always shows up on time.
2. Trending vs. Ranging Pairs
The MACD thrives in trending markets. For pairs with strong directional moves, signals like crossovers and divergence are often more accurate. In contrast, pairs stuck in sideways ranges-especially some exotic pairs-can generate endless false signals. Using the MACD there is a bit like trying to predict the weather by watching clouds shaped like dinosaurs: fun, but mostly inaccurate.
3. Volatility Matters
Highly volatile pairs can make the MACD noisy. For example, exotic pairs like USD/TRY or GBP/ZAR often swing wildly, producing signals that might make your trading account scream in protest. Stick with the major and the odd minor pairs where price action is smoother for more dependable results.
4. Combining Pairs and Timeframes
For best results, combine the right pairs with the right timeframe. EUR/USD on a 4H chart is a good example. Usually reliable. USD/TRY on a 5M chart? Only if you enjoy adrenaline and regret. Always check higher timeframe trends before acting on a lower timeframe MACD signal.
In short, major pairs and trending markets are where the MACD really earns its stripes. Exotic, choppy, or low-liquidity pairs? Consider them “MACD-unfriendly zones,” at least if you want to keep your blood pressure in check.Conclusion
The MACD is one of those indicators that every forex trader seems to have on their charts-and for good reason. It’s versatile, relatively easy to read, and can give valuable insight into trend direction, momentum, and potential reversals. But let’s be honest: it’s not magic. It lags, it can give false signals, and it’s best used alongside other tools like support/resistance, price action, or even a dash of common sense.
When used wisely, the MACD can help traders spot opportunities on major currency pairs, confirm entries and exits, and avoid getting caught in sideways market whipsaws. Picking the right timeframe-whether it’s a quick 15-minute chart for scalping or a daily chart for swing trades-is crucial to making it work effectively.
Ultimately, the MACD is a tool, not a crystal ball. It can give you an edge if you understand its strengths and limitations, but relying on it blindly is a recipe for frustration (and possibly losing a bit of sleep). Test it, combine it with other techniques, and remember in forex, no indicator is perfect, but a smart trader can make even a lagging line feel like a superpower.
● Gold and silver hit record high
● Platinum touches $2,100 per ounce
● Palladium doubles since January
Precious metals rise together
Precious metals are pumping across the board. Gold wasted no time pumping straight to $4,400 per ounce this morning, surpassing its previous record high established back in October. It was not alone. Silver reached all the way up to $69 per ounce within hours of the opening bells across Asia, pushing even further into record high territory. The white metal is up a staggering 140% since the start of the year, and is by no means alone. After breaching $2,000 last Friday, platinum blasted straight out of the gate this morning, moving up to $2,100 per ounce. Platinum is up over 130% since January and is now only $200 away from beating its previous all-time high of $2,300 per ounce, recorded back in 2008. As if that were not enough, palladium also continued its ascent this morning, reaching to $1,850 and beyond, meaning the metal has joined silver and platinum in doubling since the start of the year. The drama in precious metals appears to be relatively self-contained for the time being, with markets further afield remaining unaffected.
The week ahead
Christmas is only a few days away, and the economic calendar is as barren as one would expect. With regard to the US economy, Tuesday has a couple of meagre offerings in the form of the ADP employment change and heavily delayed Q3 GDP figures, while the latest jobless claims arrive early this week on Wednesday. Other than that, there is very little to whet the appetite this week; the earnings calendar is equally mundane. With the Christmas break just around the corner, traders understandably have their sights on matters closer to home. Markets around much of the world will shut down on Thursday and Friday for Christmas and Boxing Day, while US markets will close for half a day on Wednesday but reopen on Friday.
#Gold #Silver #Metals
Slippage is the difference between the price you expect a trade to be executed at and the price it actually fills at. In forex trading, slippage happens because prices move constantly and liquidity can change in milliseconds, especially during volatile market conditions.
Slippage can be positive or negative, meaning it may either improve your execution price or make it worse than planned. It occurs across all financial markets, forex, indices, stocks, and crypto, and is a completely normal part of how markets function.
This matters because even small execution differences can quietly eat into profits or increase losses over time, particularly for active traders or those trading around news events.
What Is Slippage in Trading?
The term “slippage” refers to the change in execution price between the moment an order is placed and when it is filled by the market. In simple terms, you ask for one price, but the market gives you another.
In forex trading, slippage occurs because currency prices are constantly updating as buy and sell orders are matched. If the price you requested is no longer available, even by a fraction of a second, your trade will be filled at the next best available price.
Slippage is most noticeable during periods of high volatility or low liquidity, but it can happen at any time. For this reason, slippage is not a broker trick or a system failure, it is a natural consequence of how live markets operate.
Key characteristics of slippage:
It affects both entries and exits
It can be positive, negative, or neutral
It occurs more often during fast markets
It cannot be fully eliminated, only managed
As a result, understanding slippage is essential for realistic trade planning and risk management.
Types of Slippage
In forex trading, slippage generally falls into three categories: positive slippage, negative slippage, and no slippage. A small amount of slippage is a natural market phenomenon because bid and ask prices are constantly changing as orders flow through the market.
In simple terms, slippage occurs when the price available at the time of execution is different from the price you requested. Whether this difference works for or against you depends entirely on market conditions at that moment.
This matters because traders often focus only on negative slippage, when in reality slippage can sometimes improve execution as well.
Positive Slippage
Positive slippage occurs when a trade is executed at a better price than expected. In forex trading, this typically happens when price moves in the trader’s anticipated direction between order placement and execution.
For example, you place a buy order on EUR/USD at 1.1000, but due to a quick dip in price, the order fills at 1.0997 instead. You enter the trade at a better price without doing anything differently.
Positive slippage usually occurs during fast markets where liquidity briefly improves or when price momentum works in your favour. For this reason, slippage isn’t always something traders should fear.
Negative Slippage
Negative slippage happens when a trade is filled at a worse price than expected. This is most common during periods of high volatility, thin liquidity, or sudden market moves against your position.
For instance, you place a stop-loss at 1.1000, expecting to exit there, but a sharp price move causes the order to fill at 1.0990 instead. The trade loses more than planned, even though the stop was placed correctly.
Negative slippage matters because it increases risk beyond what was calculated when the trade was entered.
No Slippage
No slippage refers to situations where the execution price exactly matches the requested price. While this is the ideal outcome, it is less common during active market conditions.
No slippage is most likely to occur during high-liquidity sessions, calm market environments, or when using limit orders instead of market orders. Think of it as getting exactly what you ordered, possible, but not guaranteed in a fast-moving market.
Order-Based Slippage
Different types of orders experience slippage in different ways. The way an order is executed, not just market conditions, plays a major role in how much slippage a trader experiences.
Market Order Slippage
Market orders are filled at the best available price, not a guaranteed price. If the market moves quickly, the execution price may differ from what the trader expected.
Stop-Loss and Take-Profit Slippage
Stop-loss and take-profit orders are triggered as market orders. During volatile conditions, they may be filled several pips away from their trigger level.
Limit Order Slippage
Limit orders avoid slippage by specifying a price, but the trade may not be filled at all if the market never reaches that level.
Weekend Slippage
Weekend slippage occurs when markets reopen after a price gap caused by news or events while the market was closed. Orders are filled at the first available price, not the previous close.
As a result, traders should choose order types based on both strategy and execution risk.
Expected vs Unexpected Slippage
Slippage can be divided into two broad categories: expected slippage and unexpected slippage. The key difference is whether the trader could reasonably anticipate the risk before placing the trade.
Expected slippage occurs during known high-risk periods, such as major economic data releases or low-liquidity trading hours. Unexpected slippage, on the other hand, happens when the market moves suddenly without warning.
Read more：Best time to trade forex: When to enter the market during the day
This matters because traders can plan for expected slippage, but unexpected slippage is where most “what just happened?” moments come from.
Expected Slippage
Expected slippage refers to execution price differences that occur during predictable market conditions. In simple terms, you know the risk is there before you click the button.
Examples include trading during major news releases, entering trades during thin Asian-session liquidity, or placing market orders during fast-moving markets. In these situations, some loss of price precision is normal and should be factored into the trade plan.
For this reason, expected slippage is a cost of doing business rather than a trading mistake.
Unexpected Slippage
Unexpected slippage occurs when price moves sharply without prior warning. This type of slippage is usually larger and far more damaging to risk calculations.
It often happens due to surprise headlines, geopolitical events, sudden market gaps, or technical issues at the exchange or liquidity-provider level. Traders are caught off guard, and stops may fill far away from their intended level.
This is why unexpected slippage represents a higher execution risk and can lead to losses well beyond what was originally planned.
Common Causes of Unexpected Slippage
Major economic data surprises
Geopolitical events or emergency announcements
Weekend or session-open gaps
Low-liquidity market conditions
Technical or exchange-level disruptions
Read more： forex News
Expected vs Unexpected Slippage Comparison
Category
Expected Slippage
Unexpected Slippage
Definition
Anticipated execution deviation
Sudden, unforeseen execution gap
Typical Size
Small to moderate
Moderate to severe
Cause
News, volatility, thin liquidity
Shocks, gaps, system issues
Market Conditions
Known high-risk periods
Abnormal or sudden moves
Order Types Affected
Market & stop orders
All order types
Risk Level
Manageable
High
When It Happens
Scheduled events
Without warning
Impact on Traders
Reduced precision
Increased losses
As a result, professional traders treat expected and unexpected slippage very differently in their risk management.
How Does Slippage Work?
Slippage works because markets do not guarantee prices, they match orders. When you place a trade, your order is sent to the market to be filled at the best available price at that moment.
If your requested price no longer exists due to rapid price movement or insufficient liquidity, the order is filled at the next available level. The faster the market moves, the greater the chance that your intended price disappears before execution.
To put it simply, slippage is not about getting a “bad fill”, it’s about the reality of trading in a live, constantly moving market.
What Causes Slippage?
Slippage is caused by a mismatch between the price a trader requests and the prices actually available in the market at that moment. This usually happens when price moves faster than orders can be filled, or when there isn’t enough liquidity at the desired level.
In simple terms, if nobody is willing to trade at your price, the market moves on without you. The order still gets filled, just not where you hoped.
Understanding the root causes of slippage helps traders anticipate when execution risk is highest.
High Volatility
High volatility is one of the most common causes of slippage. During volatile conditions, prices can jump multiple levels in a fraction of a second, leaving no time for orders to fill at the requested price.
This typically occurs around major economic news releases, central bank announcements, or surprise headlines. Even a well-placed stop-loss can suffer slippage if price accelerates too quickly.
This matters because volatility-driven slippage is unavoidable once price starts moving aggressively.
Low Liquidity
Low liquidity means fewer buyers and sellers are available at each price level. When liquidity is thin, even small trades can push price to the next level, resulting in slippage.
This is most common during off-peak trading hours, holidays, or late-session periods. Importantly, price does not need to move far for slippage to occur, it simply needs to move where no orders exist.
For this reason, traders often experience slippage even in relatively quiet markets.
Market Gaps
Market gaps occur when price jumps from one level to another without trading in between. When this happens, stop-loss orders are triggered as market orders and filled at the first available price.
This can result in significant slippage, especially after weekends or unexpected news events. Crucially, this type of slippage is completely unavoidable, there is no price to fill at in between.
This is why holding trades over the weekend always carries additional execution risk.
Order Type
Different order types expose traders to different slippage risks. Market orders accept any available price, making them the most vulnerable to slippage.
Stop orders convert into market orders once triggered, which is why stop-loss slippage is so common during fast markets. Limit orders avoid slippage entirely, but at the cost of potentially missing the trade.
As a result, order selection plays a major role in execution quality.
Spread Widening
Spread widening occurs when the gap between the bid and ask prices increases sharply. This often happens during periods of high volatility or low liquidity.
When spreads widen, execution prices can shift dramatically, even if the underlying price hasn’t moved much. Traders may experience slippage simply because the tradable prices have changed.
This is why slippage and spread widening often go hand in hand.
Read more:What Is the Spread in Forex? Learn to Calculate and Trade It
Examples of Slippage in Trading
The most common way slippage occurs is when a trader uses a market or stop order during fast-moving market conditions. In these situations, the price the trader sees on the chart may no longer be available by the time the order reaches the market.
In practice, slippage is more often unfavourable than favourable, particularly when exiting trades under pressure. However, positive slippage does occur and is simply less talked about.
Slippage During a News Release
A trader places a stop-loss on EUR/USD ahead of the Non-Farm Payroll (NFP) report. The stop is set at 1.1000, and the trader expects to exit there if the trade goes wrong.
When the data is released, price spikes sharply and gaps through multiple levels. The stop-loss is triggered but fills at 1.0985 instead. The trader loses more than planned, even though the stop was placed correctly.
This is a classic example of volatility-driven negative slippage.
Positive Slippage on Entry
A trader places a market buy order on GBP/USD at 1.2500 during an active London session. As the order is being executed, price briefly dips due to a large sell order entering the market.
The trade fills at 1.2497 instead of 1.2500. The trader starts the position with a slightly better entry, gaining positive slippage without intending to.
This example shows that slippage isn’t always harmful, it’s simply part of live market execution.
Weekend Slippage
A trader holds a position over the weekend with a stop-loss set at 1.2000. Over the weekend, unexpected geopolitical news breaks.
When the market opens on Sunday night, price gaps down and the stop-loss fills at 1.1950. The loss is significantly larger than planned, despite proper risk management during the week.
This illustrates why weekend slippage is one of the most dangerous forms of execution risk.
As a result, slippage should always be treated as a probability, not an exception, especially during high-risk market conditions.
When Does Slippage Occur?
Slippage tends to occur during specific market conditions rather than randomly. While it can happen at any time, certain periods consistently produce higher execution risk.
Understanding when slippage is most likely allows traders to adjust position size, order type, or avoid trading altogether.
High-Impact News Releases
Slippage is extremely common during major economic announcements, particularly when results differ from market expectations.
Common slippage-heavy events include:
Non-Farm Payrolls (NFP)
CPI inflation reports
GDP releases
FOMC statements and interest rate decisions
Central bank press conferences
These events cause sudden volatility, spread widening, and rapid price jumps.
Market Open or Close
At market open and close, liquidity can be uneven and spreads unstable. Orders placed during these times may be filled at unexpected prices, especially if markets open with a gap.
Low-Liquidity Trading Sessions
Slippage is more likely during quiet trading sessions, such as late U.S. hours or holiday periods. Fewer participants mean fewer prices available to trade at.
Order-Based Slippage
Certain order types are naturally more vulnerable:
Market orders: No price protection
Stop orders: Convert to market orders when triggered
Take-profit orders: Can slip during sharp reversals
Stop-loss orders: Particularly vulnerable during gaps
This is why execution risk should always be considered when choosing how to enter or exit a trade.
How to Avoid Slippage
While slippage can never be eliminated entirely, traders can take several steps to reduce how often it occurs and how severe it becomes. The goal isn’t perfect execution, it’s damage control.
In simple terms, slippage is about when you trade, what you trade, and how you place orders. Get those three right, and slippage becomes an occasional inconvenience rather than a regular account killer.
Avoid Trading During High Volatility
High-impact economic news is one of the biggest causes of slippage. During these moments, spreads widen, liquidity thins, and prices jump multiple levels in seconds.
Events such as NFP, CPI, GDP releases, and central bank decisions are prime examples. Traders who insist on trading during these periods must accept a higher execution risk.
For this reason, using an economic calendar and staying out of the market during major announcements is one of the simplest ways to reduce slippage.
Choose High-Liquidity Markets
High-liquidity markets generally offer better execution and tighter spreads. Major currency pairs such as EUR/USD, GBP/USD, and USD/JPY tend to have more participants and deeper order books.
Trading during active sessions, particularly the London and New York overlap, also improves execution quality. This matters because liquidity, not volatility, is the trader’s best friend when it comes to slippage.
Use Limit Orders Instead of Market Orders
Limit orders allow traders to specify the exact price they are willing to trade at. This removes slippage entirely, but it introduces a new risk: the trade may not be filled.
Market orders guarantee execution but not price, while limit orders guarantee price but not execution. Choosing between them depends on whether execution certainty or price precision matters more for the strategy.
For this reason, disciplined traders often use limit orders for entries and market orders only when speed is essential.
Manage Position Size to Reduce Slippage
Larger orders are harder to fill cleanly, especially in thin markets. Big positions may be filled across multiple price levels, increasing slippage.
Reducing position size improves execution and keeps price impact to a minimum. This is particularly important for retail traders operating outside peak liquidity hours.
Consider Guaranteed Stop-Loss Orders
Guaranteed stop-loss orders ensure that a stop is filled at the exact price specified. These are most useful during extreme volatility or when holding trades over high-risk periods.
The trade-off is cost, guaranteed stops usually come with wider spreads or additional fees. However, for traders who value certainty over cost, they can be a valuable risk-management tool.
Avoid Holding Trades Over the Weekend
Weekend gaps are a major source of unexpected slippage. News events can occur while markets are closed, causing price to reopen far from Friday’s close.
Closing trades before the weekend removes this risk entirely. This is why many experienced traders prefer to start each week flat and risk-free.
How to Trade During Slippage
Sometimes slippage is unavoidable. When that happens, the goal shifts from avoiding it to trading around it intelligently.
Place Limit Orders Instead
Limit orders prevent slippage by refusing to fill at worse prices. While this may mean missing some trades, it protects execution quality over the long term.
Use Stop-Limit Orders Instead of Stop Orders
Stop-limit orders add a price cap to stop execution. This prevents extreme slippage but introduces the risk of not being filled during fast markets.
They are best used in moderately volatile conditions rather than extreme news events.
Trade Only Major Currency Pairs
Major pairs typically have tighter spreads, deeper liquidity, and better execution. Exotic and minor pairs are far more prone to slippage, especially during off-hours.
Scale Into Positions
Scaling into trades reduces execution pressure. Instead of entering a full position at once, traders build positions gradually across multiple price levels.
This approach reduces slippage and smooths out average entry price, particularly in volatile markets.
Read more：15 Best Trading Strategies Recommended by Top Traders
FAQ
What is slippage in forex?
Slippage in forex is the difference between the expected price of a trade and the price at which it is actually executed. It can be positive or negative and usually occurs during volatile or low-liquidity market conditions.
Is slippage good or bad?
Slippage can be both good and bad. Positive slippage means a trade is executed at a better price than expected, while negative slippage results in a worse execution price and higher trading costs.
How much slippage is normal in trading?
Normal slippage depends on the market, liquidity, and volatility. In highly liquid forex pairs during active sessions, slippage is often minimal, but it can increase significantly during news releases, gaps, or thin markets.
Conclusion: Understanding Slippage as a Trader
Slippage is not a flaw in trading; it’s a reality of live markets. Prices move, liquidity changes, and orders are matched in real time, not at guaranteed levels. Once traders accept this, slippage becomes something to manage rather than fear.
The key reason slippage causes problems is not because it exists, but because it’s often ignored when trades are planned. By choosing the right order types, trading during liquid sessions, managing position size, and avoiding high-risk periods, traders can dramatically reduce its impact.
In simple terms, slippage rewards preparation and punishes complacency. Understand it, plan for it, and it stops being a nasty surprise and becomes just another part of professional trading.
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● Platinum approaches $2,000
● US inflation softens
● Rate hike for the Japanese yen
Platinum eyes $2,000
The rally in platinum continued yesterday, pushing the metal to within touching distance of $2,000 per ounce and matching its 2008 price tag. Platinum has now doubled since the start of the year, an accolade also achieved by silver earlier in the month, but the precious metal may not be the last. The club has a couple of weeks left to welcome a third member into its ranks, this time in the form of palladium, which surpassed $1,750 yesterday and is up 90% so far this year. Gold came close to another record high on Thursday, but ultimately fell short, settling to a minor loss at $4,332 per ounce by the daily close.
US inflation softens
Markets received a surprising update yesterday when the Bureau of Labor Statistics revealed a significant slowdown in US inflation. Year-over-year inflation was expected to hit 3.1% in November, but the official figure came in at just 2.7%. Core inflation, which excludes the more volatile components such as energy and food, lowered to 2.6%, falling far short of expectations of 3.0%. The unexpected figures buoyed US stock markets, lifting the Dow, S&P 500 and Nasdaq to positive daily closes. It is still too early to be thinking about the next move by the Federal Reserve, but should inflation continue to show signs of abating, it will open the door for future rate cuts on the dollar, which are currently not expected until March at the earliest.
Rate hike for the Japanese yen
The Bank of Japan raised the interest rate on the yen to a 30-year high of 0.75% this morning. The move was widely expected and provoked little to no reaction in currencies or in financial markets in general. The central bank is expected to continue raising rates into next year, a shift that will eventually impact the relative value of the yen, which now sits at decade-lows against most major currencies. Low rates have made the Japanese yen very attractive as a source of cheap financing in recent years, but such a model could quickly disappear if the BoJ keeps closing the gap between the yen and the dollar.
#Platinum #Inflation #JPY
● Crude slides on oversupply fears
● Silver touches $66
● Platinum challenges $1,900
Precious metals shine
Silver is rallying once again this morning, touching $66 per ounce early in the Asian session. The white metal is not alone. Platinum has pushed aggressively higher over the past four sessions and judging by this morning’s performance, today will likely be the fifth. Platinum is currently challenging $1,900 at the time of writing and if it rises much higher will match prices not seen since 2008. The metal still has a long way to go before notching a new record high, which stands near $2,300 per ounce, but given the surge in silver so far this year, traders will understandably be entertaining such a possibility. Palladium is also looking at its fifth consecutive day in the green, and is now reaching over $1,650 per ounce. Despite a minor loss yesterday, gold still managed to close above $4,300 per ounce, and remains comfortable above that threshold as of this morning, but attentions are focused elsewhere for the time being.
Crude oil sinks lower
Crude oil prices fell to fresh multi-year lows on Tuesday. Futures for the Brent Crude benchmark were briefly pushed below $59 per barrel yesterday, while West Texas Intermediate futures were trading under $55 at one point. Such prices have not been seen since 2021 and reflect a global supply glut that has been building for much of the year. Since April, OPEC+ has continued to ramp up production, rapidly unwinding years of output cuts that had previously buoyed crude oil prices. The simple fact of the matter is that supply is outpacing consumption and this dynamic is unlikely to change in the near future. No one wants to reduce production, because no one wants to cede market share to their competitors. As peace talks between Russia and Ukraine continue to see progress, the probability of Russian oil re-entering the market increases – something that OPEC is painfully aware of. Should the sanctions against Russia be lifted in earnest, the additional player in worldwide oil markets could force prices down even further as different parties attempt to wrestle market share from one another.
#Oil #Silver #Platinum
