This article is not financial advice or trade advice, only explanation.
Width of spread, slippage and price execution issues in modern markets
Traders frequently call out how their expected trade entry price ends up much worse in actual execution — e.g., they place a limit or market order expecting one price, but get filled at a worse price, or slippage eats into their profit. This is especially true when volatility is high, or when trading non-major pairs (in forex) or thinly-traded stocks.
In 2025, with more algorithmic trading and fragmented liquidity (multiple venues, ECNs, dark pools), the nominal chart price doesn’t always equate to the executed price you will get. Quote stuffing, latency arbitrage, and other order-book manipulations can cause gaps, ghost orders, or delayed fills. For example, “stuffing” orders (large numbers of fake orders) can create an illusion of liquidity that disappears just as you try to trade.
As a result, traders may find that their risk calculations (based on intended entry/exit) are invalidated by execution friction, causing worse outcomes than planned.
How to Overcome It
a) Trade during high-liquidity sessions: For forex, use London or New York overlaps; for stocks, trade when the market is active. Liquidity reduces slippage and improves execution.
b) Use limit orders when possible: Instead of always using market orders, use limit orders at planned price levels. This forces discipline and helps avoid paying excessive spread/slippage.
c) Check broker/execution quality: On forums like this forum or Reddit traders often compare brokers’ spreads, execution speed, slippage reports. Pick a broker with strong reputation, low hidden costs.
d) Include “execution risk” in your risk model: When calculating risk (stop size, position size), assume some margin for slippage/worse fill. E.g., if you target a stop of 50 pips, assume you might lose 55–60 instead.
e) Avoid trading right around major news/events: Volatility spikes often widen spreads, increase slippage, and you may get worse fills. Pause or reduce size during such times.