Why it matters
Slippage changes your true stop distance, your true entry, and therefore your true expectancy. Ignoring it is how ‘good backtests’ become live losses.
Operational use: this is how the market taxes urgency. When it appears, slow down or size down.
Common trap
Using tight stops in regimes where slippage is volatile. Your stop becomes a lottery ticket, not a risk control.
Example
Your stop is 8 pips. In normal conditions you slip 0–1 pip. During volatility spikes you slip 4–8 pips. Your risk model just doubled without permission.
Operational cue: if you can’t point to it on the chart, in the DOM, or in your broker logs, treat it as a story and trade smaller.
Notes
Quick rule
- If you see this repeatedly, you are in a different regime than your model assumes.
- Regime change usually means position size change.
- When in doubt: trade smaller, or don’t trade.