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What does the slip point mean in foreign exchange trading?
Slip point refers to a trading phenomenon in which the customer places an order and the actual trading point is different. \x0d\ \x0d\ Many people know what a slip point is, but they don't know how it comes from. Some people say that the market has changed greatly, so there is a slippery point; Some people even say that it is impossible not to slip, but this is not correct. The correct statement is that the slip point is either intentional by the dealer or the service of the dealer can't keep up. The following is a detailed explanation of this problem: \ x0d \ x0d \ (1) Traders deliberately slip \ x0d \ x0d \ foreign exchange transactions are different from stock and futures transactions, and they are matchmaking transactions, while foreign exchange transactions are transactions between customers and banks through platforms, and banks have net positions. By sneaking, the transaction price is unfavorable to customers, and banks and distributors are profitable. Even some banks privately agreed to share the slip points when signing cooperation treaties with distributors. Of course, some traders will not push the customer's transaction bill to the market. At this time, it is more beneficial for them to slide a little. \x0d\ \x0d\ Further reading: Why does the platform slip and delay? Explain the MT4 Virtual Backend Plug-in in detail \x0d\ \x0d\(2) Slippage that the service can't keep up with \x0d\ \x0d\ Generally speaking, foreign exchange trading means that banks provide quotations to traders and traders provide quotations to customers. When a customer makes a transaction, the transaction instruction arrives at the dealer's server and is then forwarded to the banking system, where the transaction is made. Due to the existence of forwarding, the quotation will be partially distorted, and the slip point will be inevitable when the market is big. \x0d\ \x0d\ So by improving the service, it is possible to avoid slipping, but the cost is high \x0d\ \x0d\ First of all, the server is better and the application software is advanced. In addition, the most important thing is that the trader's quotation comes directly from the bank and has not been forwarded. Data transmission comes directly from the bank, and both sides have high costs. In addition, banks charge dealers rent, which is extremely expensive. Ordinary traders (even regular traders) feel that it is not cost-effective and generally do not want to do so.