A diligent beginner who has mastered technical analysis, refined their strategy on a demo account, and achieved consistent growth of their virtual deposit may eagerly open a live trading account with a preferred Forex broker—only to discover, too late, that Forex harbors numerous hidden pitfalls. Among the most common are slippage and requotes.
Slippage and Requotes in Real-World Forex Trading
The concepts of slippage and requotes are closely linked. Let’s illustrate with a simple example: A trader opens a long position on EUR/USD at Point 1, priced at 1.29442. The price moves favorably, and the trader decides to lock in profit at Point 2, targeting 1.29874.
However, during order processing by the broker, the market price drops below Point 2. Instead of celebrating a profitable close, the trader sees something like this:
The trader attempts again to close the position—and succeeds only at Point 3, at 1.29755: nearly 12 pips lower than intended. Recall that for EUR/USD traded on a standard lot, 12 pips equals $120. Alternatively, a stop-loss might trigger dozens of pips worse than planned.
What actually happened?
The trader encountered slippage and requotes. Slippage refers to the difference between the price at which a trader requested order execution and the actual price at which the broker executed it. This occurs when, during the fraction-of-a-second transmission from trader to liquidity provider, the market price changes—making execution at the requested price impossible. Slippage can be positive (better price) or negative (worse price), depending on market direction.
Common causes of slippage include:
- High volatility, especially around major economic releases such as interest rate decisions or Non-Farm Payrolls;
- Slow order execution due to connectivity issues on either the trader’s or broker’s side;
- Broker misconduct—particularly by so-called market makers (“dealing desks” or “kitchens”), which intentionally delay orders because client losses represent their profit.
Requotes are simpler. A requote (from English “re-quote”) is the broker’s request to confirm order execution at a new, updated price. This delay arises from the same causes listed above. When prices move rapidly—and the broker uses Instant Execution (requiring exact price matching)—requotes become a significant issue, especially during high-impact news events.
Instant Execution vs. Market Execution and Their Impact on Slippage
To fully understand these phenomena, it helps to distinguish two main order execution models: Instant Execution and Market Execution.
In Instant Execution, the broker either fills the order at the exact requested price—or sends a requote if that price is no longer available.
Example: A trader requests to buy EUR/USD at 1.2950. Order processing may take up to 20 seconds. During that time:
- If the price stays unchanged—the order executes at 1.2950.
- If the price falls—the order still executes at 1.2950 (no slippage).
- If the price rises—the broker returns a requote instead of executing.
The advantage of Instant Execution is precise entry control per the trader’s specifications.
In Market Execution, the broker fills the order at the best available market price—not the requested one.
Same scenario: Trader requests to buy EUR/USD at 1.2950. Possible outcomes:
- If the price remains unchanged—the order executes at 1.2950.
- If the price moves up or down—the order executes at the current market price.
The advantage of Market Execution is speed. Its drawback is lack of price guarantee—especially dangerous during high volatility, when price gaps may cause large, unexpected deviations from the requested level.
How to Minimize Slippage in Forex Trading
Slippage is not just inconvenient—it’s often costly. While no method guarantees zero slippage, several practical steps help minimize its financial impact.
Method #1: Adjusting Maximum Deviation in MetaTrader 4
When placing a new order in MetaTrader 4, traders can set a maximum allowable deviation (in pips) from the requested price. If the market moves beyond that threshold, the order won’t execute—and the platform will display a requote message instead.
Method #2: Using Pending Orders
Placing pending orders—including Limit, Stop, Stop-Loss, and Take-Profit—helps avoid slippage in most cases. However, they offer limited protection during extreme, rapid price gaps.
Method #3: Choosing the Right Broker
When selecting a Forex broker, carefully review their order execution terms—a detail beginners often overlook while focusing on bonuses. Reputable, long-established Forex brokers frequently highlight fast, reliable execution as a core competitive advantage.
In summary, the single most important factor in protecting against slippage and requotes is choosing a trustworthy broker. Unfortunately, although most brokers claim identical trading conditions on demo and live accounts, demo orders execute instantly—and slippage rarely appears. Therefore, beginners should avoid rushing into deposits with brokers offering questionable incentives. Choose a reputable broker, practice using pending orders, and continuously refine your skills—to safeguard your capital from unexpected losses.
FAQ
What causes slippage in Forex?
Slippage occurs due to market volatility, slow execution, or broker practices—especially during news events or low liquidity.
Is slippage always bad?
No—slippage can be positive (better fill) or negative (worse fill). Negative slippage is more common and riskier for traders.
How can I avoid requotes?
Use Market Execution mode, place pending orders instead of market orders, and choose brokers with fast, transparent execution—avoid dealing-desk models.
