Slippage happens when your orders are not filled at the requested price and it can happen due to a lack of liquidity at the time of order execution. If you have ever traded a highly volatile news event such as NFP or FOMC, surely you would have noticed the significant difference between the price that you see when you place a market order and the actual price that the order was executed.
Traders often overlook slippage and it can be costly in the long run.
Putting things in perspective:
If you experience a slippage of 5 cents on gold, that translates to 5 USD per standard lot traded and it adds up quickly if you take enough trades.
Therefore, it is crucial that you choose to trade with a broker with deep liquidity pools across all instruments to make sure you are getting the best execution possible at all times.
Alchemy Markets works with more than 20 Tier 1 Banks and Non-bank LPs to ensure we have more than enough liquidity to cater to huge volumes of trading.
Other than finding a broker with deep liquidity, traders can also use a VPS for their trading. Not only can a VPS reduce the latency for trading (minimizing slippage), there are many more benefits and you can find out more about VPS here.
Calculating the costs of trading
Now that we know the importance of knowing what our costs are, how much does it cost to trade at Alchemy Markets?
- Commissions
If you have a Classic account and trades FX and Metals, you are not paying trading commissions but the spreads start as low as 0.8 pips.. It goes as low as $2 per lot per side for our VIP Account. A trade commission table will also be included at the end of the article for your reference.
- Spreads
Since you are trading with Alchemy Markets, the spreads that you get is super competitive as an all-inclusive costs.
EURUSD average spreads = 0.0 pip – 0.1 pip
- Slippage
Alchemy Markets is known for its exceptional execution with trades getting executed in 30ms or less on average. Not only that, but we have deep liquidity on the Top of Book, streamed by more than 20 Banks and Non-banks LPs, so clients can get the best execution even if they place huge lot sizes per click. Slippage are minimal to none, but do expect minor slippage if you are trading huge lots during volatile moments such as important economic news releases.
Recap
To summarize,
- Trading commissions
- Spreads
- Slippage
are the three main components of your costs of doing business as a trader.
If you are serious about trading and want to manage it like a business, trade with a broker that has a low commissions structure, tight raw spreads and exceptional execution to improve your bottom line profitability.
Alchemy Markets – Trade Commissions
Get Access Now – Alchemy Markets
The only place where you get to trade more than 1000 instruments including Stocks, FX, Cryptos, and many more with ultra-low spreads and institutional-grade liquidity.
