We will introduce the high execution power, slippage, and how to make profits in xm MT trading. It is extremely difficult to completely avoid slippage, and it occurs regardless of the Forex broker. In order to reduce trading costs, it is important to choose a FX broker that has a small slippage frequency and width.
What is slippage
Slippage is the discrepancy that occurs between the order price and contract price in FX trading. For example, if you place an order to buy dollar yen at 1 dollar = 100.00 yen, and the actual executed price is 1 dollar = 100.02, there will be an error of 2 pips. Many people who use overseas Forex companies use automatic trading tools (EA), and depending on the time of day, you may be concerned about details such as execution timing, so be sure to check them.
Why Slippage Occurs
There are three reasons why slippage occurs in FX trading. This will especially affect those who are doing scalping with currency pairs, so let’s learn about the environment. It can also be used as an indicator when selecting a FX company to operate. In that respect, I recommend XM as its conditions are better compared to others. There is relatively little risk and there are no withdrawal refusals. For more information on fees, zero cuts, leverage, etc., please refer to the official website.
Communication speed is slow
In trading, where prices fluctuate on a second-by-second basis, a delay of just a few seconds can be fatal. A slow internet connection means that it takes time for the order details to reach the FX broker’s server, and as a result, slippage occurs because it takes time from order to execution. Standard accounts are at a disadvantage because the spread is wide enough. As a countermeasure, speedy payment is important.
buy-sell balance
When the demand for a particular currency increases due to economic indicators or statements from important people, orders for that currency will rush in, making it difficult to execute even if you click, and the balance between buyers and sellers will be disrupted, and buyers will not be able to execute. Therefore, we are forced to accept orders at unfavorable prices. In addition, this puts a strain on the FX broker’s server, which can lead to slippage if orders cannot be processed smoothly.
Forex trader operation
There are two major types of Forex traders: the “trading method in which the trader and the Forex trader trade directly (DD method)” and the “trading method in which the trader places an order in the market without going through the Forex trader (NDD method)”. In the DD method, it is practically possible to move maliciously and intentionally. There is an image that slippage often occurs in Forex traders who take this method, and if it is a malicious trader, it is possible to intentionally generate slippage that is disadvantageous to traders and steal customer profits.
Slippage at XM Trading
XM’s official position is that “slippage is almost non-existent”. Be careful when announcing economic news, etc., as a sudden rise or fall in market prices can cause major changes.
In order to avoid slippage, it is important to “use a trader with high contract power” and “do not trade during slippery hours”. XM Trading has a very high execution power, so you can trade with peace of mind. Especially during high leverage trading, if slippage occurs, it can lead to a big loss. So use a company you can trust. XM is one of the forex brokers with the least slippage.
XM adopts the NDD method
Since XM uses a trading method called the NDD method in which “trader’s orders flow directly to the market”, it is impossible for XM to intentionally change slippage with malicious intent. Therefore, traders can trade with confidence. Of course, users can place market orders or place new limit orders if they follow the rules. Let’s accumulate market knowledge.
high commitment
XM has high execution power, and 99.35% of all orders are executed in less than 1 second. Because of this background, slippage is less likely to occur. In addition, XM does not reject orders, so you can trade with confidence without worrying about your order failing. Also, XM has additional bonuses and campaigns, and the maximum leverage is 1000x, so it is a very good company.
Unable to set allowable slippage width
Since XM does not have a function to set the allowable slippage, it is meaningless for XM users to set the allowable slippage value. However, if you are using a broker that can set the allowable slippage width, you can set the allowable slippage width in MT4/MT5. MT4 and MT5 are the most famous among the platforms provided, so be sure to remember how to use them, margin, buying and selling, and how to view positions.
Do not trade during economic or political volatility
The times when slippage is likely to occur may be “when the market changes suddenly” and “when the liquidity of the transaction is low”, and these are common contents not only for XM but also for all FX traders. Therefore, it is important not to trade when there are important economic indicators or major political movements. I don’t know how the market will move in one direction due to the announcement of important economic indicators or remarks by important people.
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