Building a slippage budget
Posted: Fri Oct 30, 2026 8:00 am
Every scalping plan has an implied cost per trade. Few include an explicit allowance for slippage, and the result is a plan that works on paper and bleeds in practice.
A slippage budget sets an expected average, such as 0.2 pip per round trip on majors in normal conditions and 0.8 pip around news. It's estimated from logged fills, not guessed.
With the budget in place, strategy expectancy is calculated net of it. If a setup earns 0.5 pip per trade before slippage and the budget is 0.3, the real edge is thin and fragile. If actual slippage drifts above the budget, an alert goes off: either the broker's execution deteriorated, or the market conditions changed.
Reviewing monthly keeps the budget honest. A rising trend in slippage can signal problems long before the profit and loss statement shows them.
Splitting the budget by order type adds clarity: market orders, stop orders and limit orders each behave differently, and averaging them together hides which one is the leak.
What's the average slippage per trade, measured from real fills?
A slippage budget sets an expected average, such as 0.2 pip per round trip on majors in normal conditions and 0.8 pip around news. It's estimated from logged fills, not guessed.
With the budget in place, strategy expectancy is calculated net of it. If a setup earns 0.5 pip per trade before slippage and the budget is 0.3, the real edge is thin and fragile. If actual slippage drifts above the budget, an alert goes off: either the broker's execution deteriorated, or the market conditions changed.
Reviewing monthly keeps the budget honest. A rising trend in slippage can signal problems long before the profit and loss statement shows them.
Splitting the budget by order type adds clarity: market orders, stop orders and limit orders each behave differently, and averaging them together hides which one is the leak.
What's the average slippage per trade, measured from real fills?