Slippage
The difference between the expected price of a trade and the actual price at which the trade is executed.
Plain-English Meaning
Slippage happens when the market is moving so fast that by the time your order reaches the market, the price has changed. It means you "slipped" to a slightly worse or better price than you originally clicked on.
Why It Matters
Slippage is an unavoidable hidden cost during major news events or in low-liquidity markets. It can dramatically alter the expected entry price or cause a stop-loss to trigger at a worse level than planned.
Simple Example
You try to buy a crypto token exactly at $1.00, but because the market is surging rapidly, your order actually executes at $1.02. That $0.02 difference is slippage.
This educational example uses selected assumptions for reference calculation purposes. Real conditions may vary by broker, exchange, or instrument.
Beginner Mistake
Trading during major economic news releases with tight stop-losses. Volatility can cause severe slippage, executing the stop-loss significantly below your planned risk limit.