A stop loss is a trigger, not a promise of price
Posted: Sat Oct 31, 2026 7:39 am
Blunt version: a stop-loss order does not exit at the stop price. It becomes a market order once the price touches that level, and the market order fills wherever liquidity is at that moment. On a calm tape the difference is zero or a few hundredths of a pip. During a spike it can be several.
Example with numbers. A long has its stop at 1.0850. A headline hits, and the bid goes from 1.0852 straight to 1.0841 with nothing traded in between. The stop triggers on the first price at or below 1.0850, which is 1.0841, so the exit is 9 pips worse than planned and the 3 pip risk turns into a 12 pip loss. Nothing was broken. That is exactly what the order type does.
Scalpers feel this most because the stop is tight relative to the typical gap. A 2 pip stop with a 1 pip gap is a 50 percent overrun, while the same gap on a 40 pip swing stop is noise.
Practical consequences:
- Size positions with a buffer for expected stop slippage, scaled for pair and time of day.
- Avoid holding scalps through scheduled releases unless the size is cut.
- Compare each stopped trade's fill with its stop level and keep a running average of the gap.
What is the average stop gap in your logs, and how much of it comes from one or two news spikes?
Example with numbers. A long has its stop at 1.0850. A headline hits, and the bid goes from 1.0852 straight to 1.0841 with nothing traded in between. The stop triggers on the first price at or below 1.0850, which is 1.0841, so the exit is 9 pips worse than planned and the 3 pip risk turns into a 12 pip loss. Nothing was broken. That is exactly what the order type does.
Scalpers feel this most because the stop is tight relative to the typical gap. A 2 pip stop with a 1 pip gap is a 50 percent overrun, while the same gap on a 40 pip swing stop is noise.
Practical consequences:
- Size positions with a buffer for expected stop slippage, scaled for pair and time of day.
- Avoid holding scalps through scheduled releases unless the size is cut.
- Compare each stopped trade's fill with its stop level and keep a running average of the gap.
What is the average stop gap in your logs, and how much of it comes from one or two news spikes?