Slippage is the difference between the price you expected and the price you got. On one trade it looks trivial. Across hundreds of automated trades, it is often the difference between a strategy that works on paper and one that bleeds in reality.
What causes slippage
- Latency: the time between the signal and the order reaching the broker.
- Spread and liquidity: thin markets fill further from the mid-price.
- Volatility: news and session opens widen spreads.
- Order type: market orders favor speed over price.
Measure it honestly
Track the requested price vs the filled price for every order, and look at the average — not the best case. Good tooling separates execution latency from fill quality so you know which one is hurting you.
Controls that actually help
- A maximum spread filter — skip the trade when the spread is abnormally wide.
- A maximum slippage cap — reject fills beyond a threshold.
- A news window lockout — the worst slippage clusters around scheduled events.
- Lower latency — a VPS near the broker shrinks the gap slippage lives in.
The mindset shift
Slippage is not bad luck — it is a measurable, controllable cost. Set ceilings, measure the average, and let the system skip trades when conditions are poor. AeronPilot reports execution quality and lets you set spread and slippage ceilings checked before every order.
Trading involves substantial risk. AeronPilot is a technical execution tool, not financial advice.