Slippage is defined as the difference between the expected price and the actually executed price.
Slippage is one of those dreaded moments of trade execution when price exceeds a stop or a limit order or even a market order. Slippage is usually seen during periods of extremely high or low volatility and generally occurs during key news releases or during off market hours and occurs both in equity and forex markets and causes detrimental problems to traders.
In the forex markets, slippage can occur both due to gaps or due to large (usually institutional) orders which tend to move the markets by a good 20 – 30 pips with all the orders in between being executed at a new (or best available) price. Slippage can also be seen during major breakout price levels, especially if a currency has been in consolidation for an extended period of time and has attracted a lot of attention from traders looking to trade the breakout range.