In this solo presentation, Adrian Reid explains how increasing trade size amplifies slippage, which can erode trading profits. He emphasizes the need to continuously monitor slippage and identify a trigger point where corrective action is required. Reid outlines five practical mitigation strategies: shrinking allocation, increasing the number of positions to reduce individual position size, tightening liquidity filter requirements, spreading orders across multiple system versions and timeframes, and converting to a properly backtested limit‑order system. He notes that the appropriate response may vary depending on account size and system allocation, urging traders of any capital level—from $50,000 to $10 million—to understand these principles. The video concludes with a call to like, subscribe, and visit Enlightened Stock Trading for additional free resources.
Chapters
The bigger your trades get, the more slippage is going to start to eat into your trading profits. So the big question is, what are you going to do about it as your account grows? As your trade size increases, you need to keep monitoring your slippage and then there's going to be a trigger point where you're going to have to do something. And that something, that action, that's what we're talking about here. What am I going to do when slippage becomes a problem? Well, I'm going to shrink my allocation, or I'm gonna increase my number of positions to shrink position size, or I'm going to increase my liquidity filter requirement, or I'm going to trade several versions of the same system that spread the orders across different timeframes, or I'm going to convert it to a limit order system and backtest that correctly to make sure it works, and then use limit orders. These are the actions we can take. But it might all be a little bit different depending on how big our account is and how much we've allocated to each system and which systems we're trading and all of that. So we all need to understand that we need to monitor slippage. We need to see when it's a problem for that particular system. And then we need to know once it's a problem, what actions we can take so that we are empowered to make the changes to our systems or our allocation or portfolio. To keep the slippage under control. So this is one of those things because one person might be trading $50,000 and another person might be trading $10 million, you know, or more. We really need to understand the principles so that we can all deal with it in a way that is relevant for our account. If you want more free trading tips from Enlightened Stock Trading to improve your results, make sure you like this video and subscribe to Enlightened Stock Trading so you don't miss the next one. And go to enlightenedstocktrading.com/free to get your free Trader Acceleration Bundle to improve your trading today.
