Slippage

A

aTrader

I realized that I have quiet an amount of slippage while trading and in the long run it adds up. I want to cut this!

What is this boards thought about slippage? Why would the slippage be less with one broker than with another? Aren’t they using the systems anyway? How can they reduce it?

Thanks for sharing!
 
what type of broker do you use?
Is it direct access - i.e. do you completely control your order, does your order go directly to the exchange or route of your choice? Can you modify or cancel your orders at will?

Are you using browser software? ie. you need to hit refresh to update prices and/or send your order

Does your broker sell order flow (a hint to this is whether or not they charge you more for limit orders as opposed to market orders). If they are selling your order, there is a broker on the other end who is paying for it and thus you are more likely to lose on the spread.

All brokers are routing to the same exchanges. However how they get there varies wildly. If your answer to the first question is no and the second two yes, and you care about giving a tick or two the the "house" every time, think about switching brokers.

barron posted a list on items you should look for in a broker: http://www.elitetrader.com/vb/showthread.php?threadid=1407 which may help you.

 
You MUST use a direct access broker, and a cable modem. Otherwise, you are wasting your time. Assuming you are, you must expect slippage. When I buy, I want in and NOW, same with selling. I buy on hte offer always, cause I expect an immediate price movement. I sell on the bid. When I determine that I am wrong, I want out right then. Slippage is usually less than a quarter per trade. The only time it is significant is during shorting, so I rarely short.
 
Does anyone experience very little slippage. If so, is it because of execution skills, trading style or broker/platform or a combination?
 
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