Slippage and requotes: causes and fixes

When you enter the foreign exchange market, you will quickly encounter two terms that separate novice traders from experienced ones: slippage and requotes. These phenomena are not glitches or errors—they are structural features of how forex pricing works, especially in fast-moving markets. Understanding them is critical to protecting your capital and executing trades with confidence.

Slippage occurs when your order is filled at a price different from the one you requested. If you place a buy order at 1.1050 and the market moves before your trade is executed, you might get filled at 1.1053. That three-pip difference is slippage. It can be positive or negative. Positive slippage means you get a better price than expected—rare but possible. Negative slippage means you pay more or receive less than anticipated, and it is far more common during high volatility, news events, or around market openings.

Requotes are a slightly different problem. A requote happens when your broker cannot fill your order at the price you requested and asks if you want to accept a new, adjusted price. Instead of your trade being executed automatically, the system pauses and presents a different rate. You then must decide whether to accept or cancel. Requotes are a hallmark of market makers and brokers with low liquidity, and they can cost you both time and money. In a fast market, by the time you accept a requote, the price may have moved again, creating a chain of delays and unfavorable fills.

The root cause of both slippage and requotes is the same: the gap between your requested price and the price at which liquidity is actually available. The forex market is decentralized, meaning there is no single exchange with an order book. Instead, prices come from banks, hedge funds, and other liquidity providers. When you place a market order, your broker must find a counterparty willing to take the other side of your trade at that specific price. If no counterparty exists—because the market moved too quickly or volume was too thin—you get slippage or a requote.

High-impact economic data releases, such as non-farm payrolls or central bank interest rate decisions, are notorious for causing extreme slippage. During these events, spreads widen dramatically, and liquidity can vanish for fractions of a second. Even if you use limit orders, you are not entirely safe. A gap in price can jump over your limit level, leaving your order unfilled while the market moves into profit or loss territory without you.

Fixing these issues requires a strategic approach, not merely hoping for better luck. The first and most effective fix is to use limit and stop-limit orders instead of market orders whenever possible. A limit order specifies the maximum price you are willing to pay for a buy or the minimum you will accept for a sell. If the market moves beyond your limit, the order simply does not fill. This eliminates negative slippage entirely for that trade, though it introduces the risk of non-execution. Stop-limit orders work similarly for entries triggered by price breaks.

The second fix is to trade during liquid sessions. The forex market operates 24 hours a day, but liquidity is not constant. The London and New York overlap session, from about 8:00 a.m. to 12:00 p.m. Eastern Time, offers the tightest spreads and deepest liquidity. Trading during the Asian session or late Friday afternoons increases your exposure to slippage because fewer participants are active.

Choosing your broker wisely is another critical fix. Electronic Communication Network, or ECN, brokers typically aggregate prices from multiple liquidity providers, reducing the likelihood of requotes. Market maker brokers, in contrast, may have a conflict of interest—they can profit from your losses and are more likely to delay fills during volatile periods. Read the fine print in your broker’s order execution policy. Some brokers explicitly state they will execute at the next available price regardless of slippage; others promise “no requotes” but only during normal market conditions.

You can also adjust your trading style to accommodate slippage. If you trade with wide stops and targets, a few pips of slippage may be negligible. Scalpers and day traders, however, operate on razor-thin margins, so any slippage can wipe out profits. If you fall into the latter category, use direct market access, or DMA, accounts that connect you directly to interbank liquidity. This is not available to all retail traders, but some brokers offer it to accounts of a certain size.

Finally, accept that slippage is not always an enemy. In fast markets, positive slippage can occur when the price moves in your favor after your order is triggered. The key is to size your positions so that a few pips of adverse movement does not ruin your risk management. Set your stop-loss orders using a buffer of a few extra pips to account for expected slippage during volatile periods. This is called slippage tolerance.

Requotes, on the other hand, have almost no upside. They signal that your broker’s infrastructure is inadequate for the trading style you are pursuing. If you experience frequent requotes, the mature response is not to complain—it is to change brokers or change your execution method.

Mastering slippage and requotes means shifting your mindset from seeing them as unfair obstacles to understanding them as predictable market mechanics. With the right tools, session timing, and broker choice, you can minimize their impact and keep your trading plan intact. In the world of forex, the trader who anticipates friction is the one who consistently executes.