Are You Losing Money Without Even Realizing It?
Let’s talk about slippage—a hidden cost that silently drains traders’ profits.
In "Study Guide for The New Trading for a Living" by Dr. Alexander Elder, slippage is described as the difference between the price you expect and the price you actually get when placing a trade. Think of it like seeing apples listed at 49 cents each but being charged 50 cents at checkout. One penny may not matter—until you’re buying 1,000 apples… or 1,000 shares.
Here’s why it matters:
Most traders obsess over commissions.
But slippage often costs them three times more than commissions.
That’s the real profit killer.
Dr. Elder’s advice for reducing slippage:
Use limit orders: They guarantee your price, even if it means missing the trade.
Avoid market orders in fast-moving markets.
Track every trade: Record the price you intended, the price you got, and how much it cost you.
Stick to liquid markets: High-volume stocks and futures have lower slippage.
Exit fast with market orders only when a trade turns against you.
This approach ensures you're in control of your entries and exits. Don’t chase trades. Don’t overpay. There will always be another opportunity.
Book: Study Guide for The New Trading for a Living
Author: Dr. Alexander Elder
If you trade or invest, this book is a must-read for building a disciplined, professional approach to the markets.
