I was going through a book on market structure and came across a line that made me stop for a second. It said that slippage is actually a good thing when you are trading breakouts. At first it did not sit right with me because we naturally treat slippage as something bad. Then I thought about it a little more and it started to make sense. Breakouts are not calm moments. They are fast and aggressive. If you get the exact fill you wanted with zero effort, maybe the breakout is not really happening with the strength you expected.

Adam Grimes says slippage is just the difference between the price you planned to trade and the price you actually get. Most traders see it as a loss that should be avoided. But in breakout trades it is normal and even healthy. A real breakout should make you chase the price a little because the market is moving with force. If you have to pay slightly higher to get in, that is a sign that the breakout has real momentum.

The real problem is when you get positive slippage. That is when the market gives you a better fill than you were expecting. For example, if you plan to buy above $50 and you assume you will get filled around $50.10 or $50.20, but you end up getting filled at $49.98 without any difficulty, that is not a good sign. Someone was eager to sell to you. That means there is selling pressure you did not expect and the breakout has a high chance of failing.