Slippage Tolerance (Max Deviation)
Also known as: max deviation, max slippage
What is it?
Slippage tolerance, often called max deviation, is a setting that tells your broker how far from your requested price an order is still allowed to fill. If the only price available is further away than your tolerance, the order is rejected instead of being executed at that worse price. Think of it as a safety limit you set in advance. Suppose you want to buy EUR/USD at 1.0850 and you set a tolerance of two pips.
If the market has moved and the best available fill is 1.0852, that is within tolerance, so the order fills. But if the best available fill is 1.0855, five pips away, the order is rejected because it exceeds your limit, sparing you an ugly fill. This is genuinely useful in fast markets and around news, where prices can lurch and an unprotected order might fill far worse than you ever intended. The catch is the trade-off: the tighter you set the tolerance, the more often you are protected from bad fills, but the more often you also miss valid trades that slipped only slightly.
Set it too loose and it never really protects you, so you absorb severe slippage when it matters most. The right level depends on how much an instrument normally moves; a calm major pair needs a tighter tolerance than a jumpy exotic or a volatile crypto pair. For automated trading, getting this setting right is important, because it silently decides which of your orders fill and which get rejected.
Why it matters: It protects you from terrible fills in fast markets, at the cost of sometimes missing the trade when the tolerance is too tight.
It trades the risk of a bad fill against the risk of missing the trade entirely.
Real-world example
With a 2-pip max deviation, an order that would fill 3 pips worse is rejected rather than executed at the bad price.
How SignalBots handles it
SignalBots' connector lets you set max deviation so signalled orders reject rather than fill at an unacceptable price.
Pro tip
Tune tolerance to the instrument's normal noise - too tight and you miss valid trades, too loose and you accept ugly fills.
Common pitfalls
Setting tolerance so wide it never protects you, then absorbing severe slippage on news.
Frequently asked questions
What should I set my max deviation to?
Wide enough to fill in normal conditions but tight enough to block severe slippage, typically a small multiple of the instrument's usual spread. Calm major pairs need a tighter setting than volatile or exotic instruments.
Why did my order get rejected instead of filled?
The only available price was further from your requested price than your slippage tolerance allowed, so the broker refused the fill to protect you from a worse price. Loosening the tolerance would let it fill, but at the worse price.
Is a tighter tolerance always better?
No. A tighter tolerance protects you from bad fills but also rejects more valid trades that slipped only slightly. There is a balance: too tight and you miss good entries, too loose and you accept ugly ones.
How is slippage tolerance different from a stop loss?
Slippage tolerance limits how far the entry or exit price can deviate when an order fills. A stop loss is a separate price level that closes a trade to cap your loss. One controls fill quality; the other controls how much a trade can cost.
Does slippage tolerance help around news?
Yes. Prices can lurch violently around news, and a sensible tolerance rejects orders that would otherwise fill far from your intended price. Just remember that a rejected order means no trade, so very volatile moments may leave you on the sidelines.