How slippage is calculated?

pdsofty

with 0% slippage amount is ₹ 8,47,050
with 1% slippage amount is ₹ 2,37,771
on 8,47,050, 1% slippage is 8470.5. So it should be 8,47,050-8470.5=8,38,580
Why so much difference ? how it is calculated?

rajat

That's not what slippage means.
If your trade was supposed to be buy at 100 rs, then 1% slippage means you get a price of 101.
If you trade was supposed to be sell at 200 rs, then 1% slippage means you get a price of 198.

Based on these prices, your new pnl is calculated.
So in the above example if your profit was supposed to be 200-100 = 100
With 1% slippage, it will be 198-101 = 97.

And that's for each and every entry/exit. Loosely translating to -> more the entry and exit in a strategy, more will be the effect of the slippage on overall PnL.