Slippage — the difference between the expected price of a trade and the price at which it is executed — is a normal part of trading, especially during high volatility. However, an unfair broker practice arises when there is auto-approval of negative slippage only. This means the broker automatically executes trades when prices move against the trader but rejects or delays favourable price movements. Recognising and understanding this practice is vital to protecting your trading profits.

Why Would a Broker Auto-Approve Only Negative Slippage?

In fair trading conditions, slippage is applied symmetrically: sometimes benefiting the trader, sometimes not. When a broker uses auto-approval of negative slippage only, it typically serves to:

• Maximise broker profits: Approving only unfavourable price movements increases the broker’s earnings at the trader’s expense.
• Reduce risk exposure: Brokers eliminate the chance of giving traders a better deal than market conditions provide.
• Discourage high-frequency or news trading: Traders relying on fast execution are disadvantaged by consistently poor fills.
• Maintain control over payouts: Limiting positive slippage ensures traders earn less than they should.

Such selective treatment of slippage is unethical and breaches the principle of fair dealing enforced by most financial regulators.

The Risks of Auto-Approval of Negative Slippage Only

Eroded profitability:
Missing out on positive slippage while consistently suffering negative slippage reduces your trading returns over time.

Strategy distortion:
Trading strategies built around tight entry and exit points can fail if execution consistently worsens.

Increased trading costs:
Even minor negative slippage adds up, making your trades more expensive and harder to profit from.

Loss of trust:
When auto-approval of negative slippage only becomes apparent, it severely damages confidence in the broker.

Potential regulatory breaches:
Top regulators require brokers to treat client orders fairly and to disclose execution practices clearly.

Signs That Your Broker Might Be Auto-Approving Only Negative Slippage

Consistent poor fills:
If trades always slip against you and never in your favour, even during slow market periods, manipulation is likely.

No execution reports:
Brokers refusing to provide detailed trade execution data may be hiding unfair slippage practices.

Unfair trade modifications:
Orders during volatile times are filled slowly when slippage is in your favour but instantly when it is against you.

No positive slippage ever recorded:
In genuine market conditions, some trades should benefit from better-than-expected prices.

What to Do If You Suspect Selective Slippage

Request execution logs:
Ask the broker for detailed logs showing how each trade was executed relative to your requested price.

Compare with market data:
Use third-party platforms like TradingView or Bloomberg to cross-check if slippage was truly unavoidable.

Contact customer support:
Raise the issue and demand an explanation of their slippage policy, specifically regarding positive slippage.

Escalate to the regulator:
Brokers like Intertrader, AvaTrade, TiBiGlobe, Vantage, and Markets.com are bound by regulations from authorities such as the Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) to ensure fair and transparent order execution.

Switch to a fair broker:
If your broker consistently disadvantages you with auto-approval of negative slippage only, it is time to withdraw your funds and move to a transparent platform.

How to Protect Yourself from Slippage Manipulation

Choose ECN brokers:
Electronic Communication Network (ECN) brokers offer direct market access and typically allow natural slippage in both directions.

Use well-regulated brokers:
Top regulators enforce execution quality standards that prevent selective slippage practices.

Monitor your executions closely:
Keep detailed records of your trade requests and executions to spot patterns of unfair treatment.

Avoid brokers offering fixed spreads with poor execution:
Some brokers offering tight spreads compensate by manipulating slippage unfavourably.

Test execution speed and slippage before depositing large sums:
Conduct small-scale tests to assess the broker’s execution practices.

Conclusion

When a broker practises auto-approval of negative slippage only, it unfairly tilts the trading environment against you. Traders must be vigilant, document execution quality, and demand fair treatment from their brokers. Protecting your capital starts with choosing brokers committed to transparency, fairness, and real market conditions.

Learn how to defend your trading edge and build stronger trading strategies by joining our Trading Courses. Trade smarter and ensure that your profits are fully protected today.