Comment on page
More Profits With Zero Slippage
Is it possible for a trading platform to deliver 100% slippage-free trading?
It’s rare, but it happens.
A great place to find it is on the DXS trading platform, where we deliver 100% zero-slippage trading all day, every day, delivering higher profits and lower losses to our traders.
Slippage is a natural part of spot market trading.
In the spot market, there is an order book that presents buy orders and sell orders. Here’s what an order book looks like:
The above image shows the prices on the left, order size in the middle and cumulative order size on the right.
To understand slippage, consider a market order to buy 60 units in the above market. The order would be filled in the following manner:
- 19.0580 units @ 91.30
- 0.7666 units @ 91.31
- 0.7665 units @ 91.32
- 39.4089 units @ 91.33
This results in an average purchase price of 91.32 for the 60 units, which is 0.02 higher than the 91.30 price quoted when you clicked buy.
That’s slippage. It’s a natural feature of order book style markets.
DXS is different. DXS imports price feeds from order book style markets. There is zero slippage on DXS. Your entire order gets executed at the quoted buy or sell price.
DXS is a market making CFD trading platform. ‘Market making’ means that DXS imports price feeds from real world markets and guarantees liquidity at the quoted buy and sell prices.
You’re not buying or selling the actual asset. So why should trading on a market making platform like DXS result in slippage?
The general answer to this question is to protect liquidity. Competing market making trading platforms import artificial slippage which always results in slightly worse order pricing.
Similar to the effect of a price spread, artificial price slippage is another feature that makes traders less likely to win, thereby helping to protect liquidity.
It may sound malicious, but at a larger scale it becomes more necessary. If a market making trading platform guarantees liquidity for very large order sizes with zero slippage then it opens up arbitrage opportunities against real world markets. This can be unsustainable for a trading platform’s liquidity providers.
We provide slippage-free trading at DXS. It’s another one of our competitive advantages. We can do so safely because:
- We focus on serving smaller traders that naturally trade smaller positions
- We apply limits on the amount you can trade on any single market
- We don’t provide an API, so there is no bot trading on DXS to exploit arbitrage opportunities
Put together, these measures ensure that we can offer you a trading experience without the added costs of slippage that can eat away at your profits.