Slippage in Forex is when a non-limit order isn’t executed at the intended price. This is usually happening during times of high volatility and often during a news event. This would indicate a market condition and probably something that a Forex Broker has little control over. Then why do so many Forex Brokers make a claim they offer no slippage? No Slippage has become a marketable phrase used by brokers like ECN or STP.
In the United States, Forex Brokers are prohibited from claiming no slippage unless they can demonstrate that all orders on its platform were executed at the original price and no requotes were given. US Brokers are also prohibited from making any price adjustments ever if they want to make this claim. The fact that regulators in the US saw how much these claims were being made and instituted this rule back in 2012.
Some brokers are very transparent about slippage and the fact that they have little or no control over it. Pepperstone is one of those that mention as an ECN broker they have no control over slippage, and when it occurs, it is the result of a lack of liquidity or a bank pulling away https://pepperstone.com/en/support/about-trading/slippage. That is why many of these brokers will “guarantee” stop or conditional orders.
One thing that is often overlooked is that slippage can also be in favor of the customer. The problem was in the past some brokers would never allow the client to benefit from the positive slippage or price improvement. There are now some brokers that see the benefits of offering their clients price improvements. Forex.com lists their execution statistics including the average price improvement per limit order and the percentage of limit order that have price improvement https://www.forex.com/en-us/trading/pricing-fees/execution-scorecard/ .
It demonstrates that it is in the interest of brokers to be transparent with the public when it comes to issues like slippage and trade execution.