In MT5 trading, why does stop loss have negative slippage and take profit have positive slippage?
In MT5 trading, the phenomenon where stop loss (SL) easily experiences "negative slippage" and take profit (TP) easily experiences "positive slippage" is essentially the result of dual effects from market execution mechanisms and MT5 trading mechanisms, not intentional targeting by the platform. If investors have objections to this, they can search this question themselves through AI or search engines.
Core reason: Execution types of SL and TP
In MT5 (especially ECN/STP brokers):
Stop Loss order: After triggering, converts to a market order (Market Order) and closes the position immediately at the current best available execution price.
Take Profit order: Similarly converts to a market order after triggering with similar execution logic.
As an ECN/STP broker rather than a market maker, when your stop loss order triggers, we immediately seek the best available price in current liquidity for execution. If the stop loss price you set cannot execute the order, it will only execute at the current market price most favorable to you, resulting in negative slippage. For products like gold with extremely fast volatility, slippage may deviate from your set stop loss price by several cents or more at certain times. However, MT5's trading mechanism does not allow positive slippage on stop loss execution. Example: You buy gold at 4550 with a stop loss at 4545. When the market touches below 4545 and immediately produces a price of 4545.3, you cannot execute at 4545.3 because MT5 believes this would cause trading disputes and damage the reputation of their trading software. You could think the market price is at 4545.3 while your set stop loss is 4545, as if MT5 intentionally stopped out your order early.
Take profit operates on the same principle but executes the opposite trade result. Take profit will only have no slippage or positive slippage, because MT5 similarly does not allow negative slippage on take profit, so the result of take profit will only be positive slippage or no slippage.
In trading, setting only stop loss without take profit will obviously result in unequal profit and loss over long-term trading. So the best way to avoid slippage losses is to set both take profit and stop loss whenever possible.
As an ECN/STP broker rather than a market maker, XNCE cannot profit from your slippage and will not actively cause slippage, because your final execution price completely matches the quotes provided by liquidity providers. Your slippage losses are equally our losses with liquidity providers. Therefore, we hope to suggest again that investors develop the good habit of setting take profit.