Does Slippage happen on FXCM platforms? Table of Contents

FXCM Slippage Statistics

A price improvement (positive slippage) occurs when your order is filled at a better price than you set.

Conversely, negative slippage occurs when the order is filled at a less favorable price.

With the run model of FXCM, both are possible, as the numbers below show.

Find out in this article what kind of urine and market conditions could potentially make it more likely to incur positive or negative slippage.

  • 24.82% of all stop, limit, “market”, and pending orders experienced positive slippage.
  • 13.08% of all stop, limit, “market”, and pending orders experienced negative slippage.
  • 69.01% of all limit and limit entry orders experienced positive slippage.
  • 54.81% of all stop and stop entry orders experienced negative slippage

These numbers refer to orders that were executed by FXCM from January 1, 2021, to January 31, 2021.

The data excludes some data relating to non-direct clients.

With FXCM, positive slippage occurs with a similar frequency to negative slippage.

FXCM believes this perfectly reflects the nature of the execution model, which aims to provide fair and transparent execution.

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Highlights of FXCM’s Order Execution

Based on data from orders placed by FXCM from January 1, 2021, to January 31, 2021, it was found that:

  • Limit and Limit Entry orders are the ones most likely to receive positive slippage.
  • Stop and Stop Entry orders are the ones most likely to receive negative slippage.
  • “Price Range” orders reduce the risk of negative slippage.
Certainty of execution
Traders use order types that offer certainty of execution when they want to ensure they enter the market.
Price certainty
Traders use order types that offer price certainty when they want to make sure their order is filled at a specific price (or a range around it).

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Types of Orders available on FXCM

There are different types of orders that you can select for your trading on the Forex market.

Each is designed for a specific trading need.

Some types of orders are particularly suitable when price volatility is high, others when it is low.

Others are preferable for positions held over the weekend.

The following information about the various types of orders can be of great support for decision making.

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Market Orders on FXCM Platforms

A market order immediately opens or closes a position at the best available price.

It is the order type most used by FXCM traders.

Features of slippage:
Market orders can experience both negative and positive slippage. An order with a “range of price” ensures the certainty of the price but not the certainty of execution. A “market” Order guarantees certainty of execution but not the certainty of price.
At market and Price Range:
FXCM’s market orders include “market” and “price range” orders. The “On Market” order involves immediate execution at the best available price. This could be the set price, a better price, or a worse price, depending on market conditions. The price executed is determined by the volatility present at that moment in the market.

The order with “Price Range” involves immediate execution only if the best available price is within a predefined range.

If the only available price is outside the set range, the order will not be executed.

This type of order, therefore, guarantees certainty of price but not of execution.

SUMMARY – The order with price range is ideal when you propose to enter or exit the market right now. The “At market” order guarantees certainty of execution but not of price. The order with “Price range” guarantees price certainty but not execution.

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Pending Orders on FXCM Platforms

A pending order will only be executed if the market price reaches the set price.

Slippage Description:
There are two types of Pending Orders: Stop Order and Limit Order. Stop order can be subject to both positive and negative slippage. A Limit Order, on the other hand, can only suffer positive slippage.
Stop Order Limit Order:
A pending order is considered a “Stop Order” when the set price is “worse” than the current market price (therefore higher in case of purchase and lower in case of sale). This type of order can be executed at the entered price, at a better price, or at a worse price depending on market conditions. The use of this type of order, especially near the publication of news and more generally under conditions of high market volatility, can lead to negative slippage.

A pending order is considered a “Limit Order” when the set price is “better” than the current market price (lower for a buy and higher for a sell).

This type of order can only be executed at the entered price or at a better price.

Thus, the trader benefits from price certainty but not from execution in this case.

The use of Limit Order may therefore be a better choice near the publication of news and more generally under conditions of high market volatility when the possibility of negative slippage is avoided.

SUMMARY – Pending orders are ideal when you propose to enter or exit at a future price. During conditions of high market volatility, a limit order is preferable to a stop order in order to avoid potential negative slippage. Please note: a limit order does not guarantee certainty of execution.

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Stop and Limit Orders on FXCM Platforms

Stop and Limit orders are designed to close positions when the market reaches a future price.

A Stop order is placed at a worse price than the current market price, when this price is reached the order will be closed immediately at the best available price.

This could be the price entered, a better or worse price depending on market conditions.

A stop order guarantees the certainty of execution, but not the certainty of the price, so there can be negative slippage.

A Limit order is placed at a better price than the current market price.

When this price is reached a conditional order to close the trade at the best available price is created.

If the best available price is better than or equal to the requested price, the order will be executed with no slippage or with positive slippage.

If the best available price is worse than the asking price, the order will not be executed and the position will remain open.

Limit orders provide certainty of price but not the certainty of execution because they are designed to be executed only at the requested price or at a better price.

Stop order can experience both negative and positive slippage.

A Limit order, on the other hand, can receive positive slippage but not negative slippage.

Stop and limit orders are ideal when you want to exit the market at a future price.

During conditions of high market volatility, a limit order can be used to close a trade and have certainty of the price even if there is no certainty of execution.

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FXCM’s Liquidity Providers

At the heart of FXCM’s business is the commitment to offering clients competitive spreads and fast execution – no requotes and no stop/limit restrictions.

FXCM EU relies on external supplier pricing for order execution.

FXCM EU acts as a counterparty for client trading, simultaneously matching client orders with another group company.

Please see FXCM EU Order Execution Policy for more information on FXCM Group Execution Venues.

FXCM EU is never exposed to market risk during the execution of the trade.

In this sense, FXCM EU will never decide not to hedge its back-to-back orders and run the risk of holding an opposite position to the client.

In a volatile market, due to the inevitable latency in the electronic trading system (mainly between the client’s internet access and the FXCM EU server), the quoted price may have moved prior to receipt of the order instructions.

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