What causes slippage during news events in forex?
How this answer was verified
- Cross-checked against broker-published fact sheets, regulator licensing databases, and ESMA product intervention notices.
- Reviewed by the FX-Brokers EU editorial desks (Markets, Platforms, Regulation). Desk structure disclosed at /about/editorial-desks.
- Refreshed quarterly. The most recent verification date is shown above. Read our methodology.
Related
What is slippage in forex trading?
Slippage is the difference between the price you expected to execute at and the price you actually received. Negative slippage costs you money; positive slippage saves you money. On retail forex, slippage is most common during news events, market opens, and weekend gaps. Low-latency ECN brokers minimise it; market-maker brokers vary.
Why do forex spreads widen during news events?
Spreads widen during major news (NFP, ECB, CPI, FOMC) because liquidity providers withdraw quotes to avoid being picked off by faster traders. The bid-ask gap widens to reflect uncertainty and to cover the risk of holding inventory through a price gap. Spreads typically normalise within minutes.
What is a stop loss in forex trading?
A stop loss is a pre-set order that automatically closes a losing position once price reaches a defined level. It limits your maximum loss on any single trade. Most professional traders risk 0.5-2% of their account per trade — the stop loss enforces that limit. ESMA-regulated brokers also provide negative balance protection as a hard floor.
Article: Slippage at News Events — A Broker-by-Broker Comparison Methodology
Slippage at high-volatility news releases is the single most important execution-quality differentiator across retail forex brokers. A repeatable methodology for measuring it produces materially different rankings than headline-spread comparison.
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