Slippage is a term often used in Forex trading. It is the difference between the expected price of a trade and the price that the trade actually executes at; but it can work either against or in favour of the trader.
Slippage occurs when in the time between when an order is sent and the time this order is actually executed the real market price moves away from the requested price. There are two different types of slippage: negative and positive.
Negative slippage occurs when your order gets executed at a price worse than the requested order price. Especially during times of high volatility the market price movements are so fast, that the market can move many times after the transmission of your order to the liquidity provider and before actual execution.
In quieter market period, if large order volumes are going through the market there is a tendency for the market movements to be volatile. This volatility can also occur over new events and during such times orders are often executed at the next best price available.
If one tries to buy the EUR/USD at a price of 1.3200, an order could get filled with a price of 1.3201. This means there was a negative slippage of 1 pip. The concept of slippage when dealing by market execution is entirely normal; but it means that trades do get filled. With Fill-Or-Kill order types a trade request in a volatile market risks being rejected.
In practice most deals are filled at the desired rate during normal market conditions.
On the flip side market orders can also be expected to receive positive slippage if the market moves in your favour in the slip second between trade request and execution.
Traders need to understand that a world without slippage isn't possible with true market conditions, but with SVSFX slippage works both ways so it can equally be in your favour as against. Execution is ultimately true and fair.