Slippage is the gap between an order's intended price and its actual execution price. It happens because price moves between the moment a signal fires and the moment the order fills, and because filling any order of meaningful size against real order-book depth moves the price somewhat. The very act of buying pushes the price up slightly, and selling pushes it down.
Slippage tends to be worse in fast-moving or thin (low-liquidity) markets, and worse for larger orders relative to available depth. A backtest that assumes zero slippage, filling every trade at exactly the signal price, will overstate real-world performance, sometimes dramatically for higher-frequency strategies.
zengtrade's cost model folds slippage into the same honest round-trip cost figure applied to every backtest and every paper fill, rather than showing a slippage-free number that would look better but wouldn't survive contact with a live order book.
Educational content, not investment advice. zengtrade is paper-first and non-custodial.