ery adept at picking the times they trade. It is said that knowing when not to trade is just as important, if not more so, than knowing when to trade. Times of poor liquidity, such as lunch times, slow moving markets and pre and post hours trading are often avoided. The concept of picking when you trade is just as important if you trade foreign exchange but not necessarily for the pIs Slippage a Problem?
Let’s face it, every trader on the Planet has wished at some point during their career that slippage did not exist. I for one have cursed at the top of my voice, let alone under my breath, at slippage on an entry or exit. However, every successful trader on the Planet has found a way to deal with it either mentally, technically or most likely with a bit of both.

The type of trader you are has a massive bearing on the extent to which slippage can affect you. Investors, long and medium term traders will worry less about slippage because the profit targets involved in this type of trading are generally very large. It is also the case that medium to long term trading often involves entry zones rather than specific entry prices. However, day trading methods, specifically scalping, can be hit hard by slippage, especially if it is excessive.

Bearing this in mind it would seem that the logical choice for most day traders would be to choose the more liquid FX market, leaving stocks out in the cold. However, this is not the case. It is possible for stock traders to set a ‘chase factor’ on their entry limit orders. This has the advantage of being able to control slippage. In fact momentum day traders thrive on this order entry system. Coupled with an account with a highly regarded direct access broker and you have the means to be able to enter orders of several thousand shares and control the risk of slippage.

Knowing When Not to Trade
Momentum traders are also very adept at picking the times they trade. It is said that knowing when not to trade is just as important, if not more so, than knowing when to trade. Times of poor liquidity, such as lunch times, slow moving markets and pre and post hours trading are often avoided. The concept of picking when you trade is just as important if you trade foreign exchange but not necessarily for the pu

a bit of both.

The type of trader you are has a massive bearing on the extent to which slippage can affect you. Investors, long and medium term traders will worry less about slippage because the profit targets involved in this type of trading are generally very large. It is also the case that medium to long term trading often involves entry zones rather than specific entry prices. However, day trading methods, specifically scalping, can be hit hard by slippage, especially if it is excessive.

Bearing this in mind it would seem that the logical choice for most day traders would be to choose the more liquid FX market, leaving stocks out in the cold. However, this is not the case. It is possible for stock traders to set a ‘chase factor’ on their entry limit orders. This has the advantage of being able to control slippage. In fact momentum day traders thrive on this order entry system. Coupled with an account with a highly regarded direct access broker and you have the means to be able to enter orders of several thousand shares and control the risk of slippage.

Knowing When Not to Trade
Momentum traders are also very adept at picking the times they trade. It is said that knowing when not to trade is just as important, if not more so, than knowing when to trade. Times of poor liquidity, such as lunch times, slow moving markets and pre and post hours trading are often avoided. The concept of picking when you trade is just as important if you trade foreign exchange but not necessarily for the p

ces. However, day trading methods, specifically scalping, can be hit hard by slippage, especially if it is excessive.

Bearing this in mind it would seem that the logical choice for most day traders would be to choose the more liquid FX market, leaving stocks out in the cold. However, this is not the case. It is possible for stock traders to set a ‘chase factor’ on their entry limit orders. This has the advantage of being able to control slippage. In fact momentum day traders thrive on this order entry system. Coupled with an account with a highly regarded direct access broker and you have the means to be able to enter orders of several thousand shares and control the risk of slippage.

Knowing When Not to Trade
Momentum traders are also very adept at picking the times they trade. It is said that knowing when not to trade is just as important, if not more so, than knowing when to trade. Times of poor liquidity, such as lunch times, slow moving markets and pre and post hours trading are often avoided. The concept of picking when you trade is just as important if you trade foreign exchange but not necessarily for the p

imit orders. This has the advantage of being able to control slippage. In fact momentum day traders thrive on this order entry system. Coupled with an account with a highly regarded direct access broker and you have the means to be able to enter orders of several thousand shares and control the risk of slippage.

Knowing When Not to Trade
Momentum traders are also very adept at picking the times they trade. It is said that knowing when not to trade is just as important, if not more so, than knowing when to trade. Times of poor liquidity, such as lunch times, slow moving markets and pre and post hours trading are often avoided. The concept of picking when you trade is just as important if you trade foreign exchange but not necessarily for the p

ery adept at picking the times they trade. It is said that knowing when not to trade is just as important, if not more so, than knowing when to trade. Times of poor liquidity, such as lunch times, slow moving markets and pre and post hours trading are often avoided. The concept of picking when you trade is just as important if you trade foreign exchange but not necessarily for the purpose of avoiding slippage. There is no real pre and post hours trading because of the available trading hours with market depth remaining good throughout. It would be na?ve to think that slippage plays no part in foreign exchange trading at all. During periods of rapid market movement slippage on market entries and hard stops is commonplace. This activity usually takes place at extremely important data releases such as Nonfarm Payrolls and interest rate announcements. Indeed retail brokers guarantee ‘the price you see is the price you get’ during ‘normal’ market hours but not at times of excessive volatility.

Out of Hours Trading
The concept of out of hours trading does not really exist in foreign exchange as it does on say NASDAQ listed shares. During the working week there is always at least one major financial centre open to facilitate trades.

Let us compare this with the NASDAQ. The NASDAQ is restricted to the hours of 09:30-16:30 eastern. Trading outside of these hours is possible but the reduction in liquidity is massive. Price gaps between one day’s close and the next day’s open are commonplace due to this lack of liquidity. If you were to add this to the possibility of company specific and geopolitical news events then huge gaps are possible. At times like this slippage on stop orders can be enormous and gaps can take you past your risk threshold. This is clearly one instant where superior liquidity in the FX market is a massive advantage.

Once again it is possible to less