Why did I lose more than my stop-loss? (slippage and gapping)

A standard stop-loss tells the broker: 'if price reaches this level, close my trade at the next available price.' In calm markets, that next price is right at your level. But in fast-moving or thin markets, the next available price can be worse — sometimes much worse — and you are filled there. That difference is slippage, and it is why a loss can exceed the number you planned.

This is not usually the broker cheating you. It reflects how markets actually work: prices move in jumps, and there is not always a buyer or seller waiting at exactly your price when it matters most.

When big news hits or liquidity dries up, prices can leap several points in an instant. If your stop sits inside that leap, it triggers but fills at the price on the other side of the jump. High-impact economic releases, central-bank surprises, and the first seconds after a market opens are classic slippage moments.

Slippage cuts both ways — it can occasionally fill you better than expected — but on stops it usually hurts. The main defences are trading smaller so any slippage is a small share of your account, and being cautious around scheduled high-impact news.

A 'gap' is when a market closes at one price and reopens at a very different one, with no trading in between. Weekend gaps in currencies, and overnight gaps in shares reacting to news, are the common examples. If your stop is inside the gap, it cannot fill at your level because that price simply never traded — you are filled at the reopening price.

This is a particular risk for anyone holding positions over the weekend or through earnings and events. If you cannot tolerate a gap against you, the honest answer is often not to hold that position through the event at all.

Practical steps: keep positions small so a worse-than-planned fill is survivable; avoid holding size through scheduled high-impact news and over weekends unless you have accepted the gap risk; and understand that 'guaranteed stop-loss' orders, where a broker offers them, fill exactly at your level for a fee — useful for event risk but not free.

Most importantly, plan for the bad fill rather than assuming the perfect one. If your risk maths only works when your stop fills exactly, your position is probably too large. Sizing for the occasional ugly fill is what keeps a normal event from becoming a disaster.