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Forex spread and slippage explained

Understand trading costs, why spreads widen and how slippage affects entries and exits.

What is spread?

Spread is the difference between bid and ask price. It is one of the most visible costs of trading.

What is slippage?

Slippage happens when your order is filled at a different price than expected. It can happen during fast markets, low liquidity or major news.

When costs increase

  • Around high impact economic releases.
  • During market open or rollover.
  • On less liquid currency pairs.
  • When volatility spikes suddenly.

    • How to reduce the impact

  • Avoid trading seconds before major news.
  • Use limit orders when exact entry matters.
  • Give stop loss enough room for normal spread.
  • Compare average costs, not just the best advertised spread.

    • Spread and slippage are part of real trading. Any backtest should include estimated costs.

    Content is for reference only, not investment advice. Forex trading carries high risk.

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