Slippage as a percentage of target, not a pip count
Posted: Mon Nov 02, 2026 10:15 pm
Slippage as a percentage of target, not a pip count
Saying slippage averages 0.4 pips sounds small. Whether it is small depends entirely on the target. On a 20 pip swing trade, 0.4 pips is two percent. On a 3 pip scalp, it is thirteen percent, and on a 1.5 pip micro-scalp it is over a quarter.
Percentage framing makes decisions simpler. A reasonable rule is that execution costs, including slippage, spread, and commission, should stay below some fraction of the average win, such as 20 or 25 percent. Beyond that, the system is operating with a thin margin of safety.
Applying that rule often reveals that a pair or session is unworkable even though it looks active. Exotic crosses with wide spreads and erratic fills may fail the test, while quiet majors pass it.
Compute the ratio for every pair and session in the journal. Rank them. Trade only the cells in the table that clear the bar and cut the rest.
That kind of pruning is boring but powerful.
What cost-to-target ratio acts as the cut-off in your own rules?
Saying slippage averages 0.4 pips sounds small. Whether it is small depends entirely on the target. On a 20 pip swing trade, 0.4 pips is two percent. On a 3 pip scalp, it is thirteen percent, and on a 1.5 pip micro-scalp it is over a quarter.
Percentage framing makes decisions simpler. A reasonable rule is that execution costs, including slippage, spread, and commission, should stay below some fraction of the average win, such as 20 or 25 percent. Beyond that, the system is operating with a thin margin of safety.
Applying that rule often reveals that a pair or session is unworkable even though it looks active. Exotic crosses with wide spreads and erratic fills may fail the test, while quiet majors pass it.
Compute the ratio for every pair and session in the journal. Rank them. Trade only the cells in the table that clear the bar and cut the rest.
That kind of pruning is boring but powerful.
What cost-to-target ratio acts as the cut-off in your own rules?