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Slippage refers to the difference between the order price you specify and the actual execution price when placing a trade.

Types of slippage:

Normal slippage: This is a natural result of objective market conditions and often occurs during sharp price movements or when market liquidity is insufficient.

Abnormal slippage: This is usually caused by improper or malicious dealing practices and is more commonly associated with market makers.

How slippage occurs:

Network delay: Prices are received from the exchange and displayed on the trading platform. After a client submits an order, it is transmitted to the exchange through the server. A slight delay may occur during this process. Under normal market conditions, it may not be noticeable, but during strong volatility, the delay can become more apparent.

Price gaps in the market: Market liquidity is essential for smooth trading. In markets such as spot gold, trades depend on counterparties being available on the other side of the transaction. When liquidity is thin, price gaps may appear, which can lead to slippage.