Limit entries versus stop entries and the slippage asymmetry between them
Posted: Sat Oct 31, 2026 7:39 pm
A limit order fills at the price or better. A stop order fills at the price or worse. That difference sounds obvious, but its consequences for scalping are bigger than people think.
Entries with a stop order tend to occur when price is moving fast through a level, exactly when slippage is highest. Entries with a limit order tend to occur when price is moving back into a level, often slower and with tighter spreads.
Over a few hundred trades, this shows up in the numbers. Limit entries often achieve their intended price, while stop entries average a worse fill.
The catch is that limit orders can miss. Price might touch the level, fill nothing, and run away. The cost shifts from slippage to missed trades.
Neither is better in general. What matters is knowing which has been used, and measuring the cost of each. A breakout strategy has to accept stop entries, but a pullback strategy can use limits.
A neat compromise for some is to use limit entries by default and switch to stop entries only when volume and spread both confirm the move. That keeps the average slippage lower while still allowing participation in the clean breakouts worth chasing.
Which order type dominates your entries, and have the costs been compared?
Entries with a stop order tend to occur when price is moving fast through a level, exactly when slippage is highest. Entries with a limit order tend to occur when price is moving back into a level, often slower and with tighter spreads.
Over a few hundred trades, this shows up in the numbers. Limit entries often achieve their intended price, while stop entries average a worse fill.
The catch is that limit orders can miss. Price might touch the level, fill nothing, and run away. The cost shifts from slippage to missed trades.
Neither is better in general. What matters is knowing which has been used, and measuring the cost of each. A breakout strategy has to accept stop entries, but a pullback strategy can use limits.
A neat compromise for some is to use limit entries by default and switch to stop entries only when volume and spread both confirm the move. That keeps the average slippage lower while still allowing participation in the clean breakouts worth chasing.
Which order type dominates your entries, and have the costs been compared?