Myths About Exit Slippage
By Dave Mabe
You might think entry and exit order slippage are roughly the same.
But they're fundamentally different situations.
Here are some myths about exit slippage:
Slippage is all the same and can be placed in a single bucket
When exiting, you need to get out, so there's not much you can do about exit slippage
The same rules apply to exit slippage as entry slippage
There's not much you can do about slippage other than "trade thicker stocks"
When your timed exit fires, a market order is the only option
All these are false.
In most strategies, exit execution boils down to this:
For entry orders, you need to get in "now," but for exit orders, you typically have far more flexibility.
More tomorrow...
-Dave
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