Can you elaborate on this? I'm not following what you mean with 'honest' latency, and why this 'should' return positive slippage
If there are 3-5 ticks between the order click and the fill at a broker pinging 300ms, I would think this as 'honest' latency. However, if there are 3-5 ticks between the order click and the fill at a broker pinging 100ms, I would suspect something is not quite right. 'Honest' latency at times returns positive slippage because all the ticks between the click and excution are generated by market forces and are not filtered.
I may be compeletely wrong here; but this is my experience trading Forex since 2003. My main Forex accounts are with OANDA, which pings 100ms. OANDA fxTrade has 1 tick delay between click and execution, OANDA MT4 3-5 ticks; I get positive slippage on OANDA MT4 at least half the time I trade. There was a time I traded Forex with another big-name 'broker' with 3-5 ticks delay; only got positive slippage less than 10 time in over 200 trades.
Ah I see Khalaad, thanks!
You use the latency combined with the experienced slippage to determine if your orders are good / 'honestly' filled.
I don't understand your example though. If both fxTrade and OANDA MT4 have a 100ms latency, and you experience 1 tick slippage and 3-5 ticks slippage in these respectively, I would say that OANDA MT is not 'honest', and that the chances of experiencing positive slippage are greatest with fxTrade.
In other words, if the average slippage with fxTrade is 1 tick, you'd have a better chance to get filled at no slippage or positive slippage than with OANDA MT since the average slippage is there 3-5 ticks. In those 100ms after submitting the order the price has to move at least 3 ticks to experience no slippage with OANDA MT, while a similar move with fxTrade would have resulted in a positive slippage of 2 points.
Regards,
Josh