Who is FTMO
FTMO was one of the first in the prop firm market and paved the way for many of the other prop firms in the last decade. It offers traders up to $400,000 in simulated capital, and up to 90% profit split.
FTMO provides a huge amount of opportunities for retail traders looking to increase their capital under management.
According to traders, the most important factor for them in a prop firm is good trading conditions. Included in that is low slippage. In this article, we will define slippage, its effects on traders, slippage concerns for FTMO traders, how to manage slippage, and more.
What is Slippage and What Are The Contributing Factors?
Slippage in forex trading refers to the difference between the expected price of a trade and the price at which it is actually executed. It occurs when there is a delay between the time the trader places an order and the time it is filled by the broker. Slippage can happen in both directions – positive or negative.
There are various factors that can cause slippage in forex trading. One common reason is high volatility in the market, especially during news releases or economic events. When there is a sudden surge in trading volumes or a lack of liquidity, it becomes more difficult for a broker to execute trades at the desired price. This is what leads to slippage.
Another factor is the execution speed of the broker’s trading platform or the trader’s internet connection. If there is a delay in transmitting the order or processing it, the market may have moved by the time the trade is executed. This results in slippage.
While slippage may seem like a minor inconvenience to some traders. It can have a significant impact on their psychological well-being, confidence, and trust in the market.
Reports of Slippage with FTMO
From researching users’ experiences with FTMO, a large majority are happy with most of the conditions, apart from slippage. As one FTMO trader put it “I had a bit of slippage issues with my challenge account, that’s why I’m giving 4 stars not 5.”
However, a few traders had slightly harsher critiques of FTMO’s slippage:
“My stop loss order was in place, but someway, somehow the market skip and the slippage of both two running trades were not closed on my order which resulted in my failure. I would be totally fine if there were no stop orders. I would not reach out to the representative for a favor had the slippage not caused harm to me.”
“Rollover spread over 40 pips and Slippage over 20 pips on a demo account and even happening on my funded trading account.”
“There is almost ALWAYS A SLIPPAGE ON YOUR STOP LOSS AND MARKET ORDERS. Be careful, always have some allowance to your daily loss limit.”
“Multiple slippages of over 20 PIPS….For perspective, I experience a total of around 5k slippage on a 100k account.”
FTMO’s Response to Slippage Concerns
When asked about precautions taken regarding slippage, FTMO answered “We do not add hidden markups or additional slippage. Trades are executed according to the pricing visible on the trading platform.” They also referred to this chart below which shows the presence of slippage, and its severity, in their trades.
Ways to Minimize Slippage
To mitigate the impact of slippage, FTMO traders can take several steps:
- Use limit orders: Placing limit orders can help control the price at which a trade is executed, reducing the likelihood of slippage.
- Trade during liquid hours: Trading during periods of higher liquidity can help reduce the severity of slippage. This is because there is usually less price disparity between bid and ask quotes.
- Implement effective risk management strategies: Diversify your portfolio, use proper position sizing, and set stop-loss and take-profit orders at reasonable levels to manage risk effectively.
- Monitor the spread: Be aware of the bid-ask spread, as it can affect the likelihood of slippage. Choose currency pairs and assets with narrower spreads if possible.
- Stay informed: Keep an eye on news events and economic releases that can lead to increased market volatility and higher slippage.
Alternatives to FTMO
Naturally, every prop firm and broker will experience some kind of slippage. This is due to the fact that there will always be time between the order is placed and by the time it is filled. However, there are a couple of prop firms that are well-known for their low slippage. Let’s look at a few of them:
The5ers
The5ers is known for its innovative approach to funding and supporting traders worldwide. In terms of slippage, The5ers aims to provide a transparent and fair trading environment for its participants. The5ers traders claim to experience minimal slippage thanks to the firm’s commitment to efficient order execution and advanced trading infrastructure. The company prioritizes minimizing slippage to ensure that traders can execute their strategies with precision and optimal performance.
Learn more about The5ers here.
FundedNext
FundedNext is a popular prop firm with forex traders. The firm warns their traders that slippage is something that they must be aware of and proactively plan for. They also claim to be committed to minimizing the occurrence of slippage for their traders.
Conclusion- Slippage with FTMO
In conclusion, understanding and effectively managing slippage is a critical aspect of trading with FTMO. Or any other proprietary trading firm for that matter. Slippage can influence a trader’s profitability, risk management, and overall performance. Making it essential for traders to employ strategies such as using limit orders, trading during liquid hours, and staying informed about market conditions. By addressing slippage as part of their trading plan, FTMO traders can enhance their ability to meet performance targets and successfully navigate the challenges of the financial markets. Ultimately working towards their trading goals.
It’s essential for traders to empower themselves with knowledge and share their valuable experiences. When it comes to trading and slippage, each individual’s journey is unique, and sharing insights can provide a rich pool of collective wisdom. So, whether you’re a seasoned trader or just starting out, we encourage you to make your own informed decisions and actively participate in discussions about slippage. Your experiences and perspectives can contribute to a broader understanding of this critical aspect of trading, and by sharing you not only enhance your own knowledge but also enrich the trading community as a whole.
One idea, that was suggested by an FTMO trader, is to try out FTMO’s free trial to test their slippage. FTMO offers an abridged version of their challenge. Traders can assess their skills and their likelihood of passing FTMO’s challenge on this account, free of charge.
