What is the foreign exchange sliding point? How can it be caused

Foreign exchange trading

Like the stock market, foreign exchange market has its own special terms. In the basic knowledge of foreign exchange, there is a word that many beginners can't understand. What is the foreign exchange slippage? How can it be caused? In order to help beginners to grasp this definition, I'd like to make an explanation for you.

What is the foreign exchange sliding point? When carrying out foreign exchange trading, there is a situation that the specific trading point issued by customers is very different from the specific trading point, which is generally called sliding point. How can foreign exchange exchange be caused? In general, the causes will be various. In today's analysis, the key lies in two aspects: one is the delay time of the Internet, and the other is the price fragmentation in the sales market. The following is a detailed introduction to these two aspects.

Level 1: network delay

We all know that in today's network era, although it is very convenient, there must be a certain time. This time will cause the difference between the trading point you issued and the final specific trading point. The whole process is detailed below.

Traders get the price information according to the exchange they belong to. The information is displayed in their own trading service platform. After placing an order, customers submit it to the exchange according to the network server. In the whole process of transmission, there is usually a relatively small delay time, which is usually invisible. However, once there is a strong fluctuation in the market, once the network server can not solve it, the delay time will be generated.

The second level: the price block of sales market

Unlike other trading commodities, such as individual stocks or futures trading, foreign exchange trading must be conducted by investors according to the service platform and financial institutions. Financial institutions and investors conduct transactions. After trading volume, financial institutions will have a net increase in the trading position of shares. If there is a slippage, the selling price is not good for investors, but financial institutions or dealers can make a net profit from it. There are even some financial institutions, when cooperating with dealers, will privately promise to classify the slip points. Sometimes, the transaction details of investors are not put into the market by dealers. At the moment, they can get more benefits from the sliding point.

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