Every futures contract trades on a central exchange order book. When you send an order, it fills against the contracts that other traders have resting on the book at each price level.

Slippage is the gap between the price you saw when you clicked and the price you actually got. It can go against you (a worse fill) or, less often, in your favor (a better fill). Most of the time when people talk about slippage they mean the negative kind.

A quick example on ES (E-mini S&P 500). You send a Market buy expecting to pay 5000.00. The market is moving fast and you fill at 5000.50 instead. That is two ticks of slippage. Each ES tick is 0.25 points worth $12.50, so two ticks is $25.00 per contract more than you planned to pay. On 5 contracts that is $125.00 before the trade has even started working.

The same forces drive slippage in every market. On futures they show up clearly on the order book.

Volatility. When price is moving quickly, the level you aimed at can be gone by the time your order arrives. Your fill lands wherever the market is now, not where it was a moment ago.

Order size versus available liquidity. Each price level on the book only holds so many contracts. If your order is larger than the size resting at the best price, the extra contracts fill at the next levels. The bigger your order relative to what is available, the more it can slip.

Market orders. A Market order asks for an immediate fill at the best available price. It prioritizes speed over price, so it is the order type most exposed to slippage. A Limit order sets a worst acceptable price, so it protects you from slippage, but it can go unfilled if price never trades your level.

Thin sessions. Liquidity is not constant through the day. When fewer traders are active, fewer contracts rest at each price, so the same order size slips further.

News. Scheduled releases (CPI, FOMC, jobs data) and surprise headlines cause a burst of orders and rapid repricing. Spreads widen, resting size thins out, and slippage can be severe for a few seconds around the event.

Futures give you an unusual amount of transparency into slippage before it happens, because the exchange publishes the depth of the order book.

The DOM shows the size at each level. The Depth of Market (the Market Depth widget in DXtrade) lists how many contracts are resting at each price above and below the market. You can see, in advance, whether there is enough size at the best price to fill your order, or whether you would have to eat into the levels beyond it. Standard CME Globex market data shows up to 10 price levels on each side.

Market orders can fill across multiple levels. In a fast market a single Market order can sweep through several price levels in one fill. If the best ask shows 4 contracts and you buy 10 at Market, 4 fill at the best ask and the other 6 fill at the next levels up. That is slippage even on a liquid contract, during a thin moment. On ES, pushing those 6 contracts one tick further costs an extra $75.00 (6 x $12.50).

Overnight and illiquid sessions widen it. Futures trade nearly around the clock on Globex, but liquidity is heavily concentrated in each contract's main session. Outside those hours, and on the naturally thinner contracts, the book is lighter, spreads are wider, and the same order slips more. Micros can be thinner than their full-size parents at quiet times too.

For a full walkthrough of the ladder, see Reading the DOM (Depth of Market).

You cannot remove slippage, but you can control how much it costs you.

Use Limit orders when price matters more than speed. A Limit caps the price you will accept, so it cannot fill worse than your level. The trade-off is that it may not fill at all.

Check the DOM before sizing up. If the levels near the market are thin, scale your size down or work a Limit rather than firing a large Market order into a light book.

Be careful around news. The seconds around a major release are the worst time for a Market order. If you trade the event, know that fills can be far from the screen price.

Prefer liquid contracts and main sessions. The deepest books (like ES, NQ, CL, GC) in their core hours give you the tightest fills. Trading thin contracts overnight is where slippage bites hardest.

Practice on the micros. A micro is a fraction of its full-size parent, so any slippage costs proportionally less while you learn how a contract fills.

This is the part that matters for your challenge and your funded account.

Slippage losses are not reimbursed. A worse fill than you expected is a normal cost of trading a live market. It is not a platform error, and it is not refunded or adjusted.

A slippage-caused breach is still a breach. If a Market order fills further than you planned and that pushes your equity through your daily drawdown, your trailing drawdown, or your max single trade loss, the breach counts. The rule engine sees your actual equity, not the price you intended to get. Slippage does not create an exception.

This is why sizing and order type are risk-management decisions, not just execution details. If you are trading close to a drawdown limit, a Market order into a thin book can be the difference between staying inside the rule and breaching it. Leave yourself room, and use Limit orders when you are near a threshold.

For the limits themselves, see Daily drawdown (5PM ET reset), Trailing drawdown (Dynamic Risk Shield), and Max single trade loss.

Slippage is the gap between the price you expected and the price you got. On futures it comes from order size meeting the real depth on the book, made worse by volatility, thin sessions, and news.

The DOM lets you see it coming. Limit orders let you cap it. Good sizing keeps it from turning into a rule breach. Losses from slippage are part of trading and are not reimbursed, and a breach caused by slippage is your responsibility to manage.

Questions? Reach us any time through the chat in the Upcomers Help Center, or email us at [email protected].