How should a prop firm simulate spreads and slippage?

Question

Accepted Answer

Use the live bid and ask from a reliable feed, so the spread is the market's own spread, and avoid adding a markup. Model slippage conservatively or not at all, and apply the same logic to every trader. Inflated spreads or artificial slippage make challenges harder in ways traders notice and resent.
Good practice:
Raw spreads: fill buys at the ask and sells at the bid from the live feed.
No hidden markup: if you add costs such as commission, publish them.
Consistent stops: trigger stop losses at the price that actually crosses the level.
Transparency: explain how fills work in your rules or FAQ.
Traders compare firms on execution, and complaints about unrealistic fills spread quickly in trading communities. PropExecutor uses the feed's raw spreads and does not mark them up, and it does not currently model commission or swap.
### If you add costs
If you decide to apply commission or a fixed cost per trade, show it in the terminal and the rules, and include it in every calculation traders can see. Costs that appear only in the account balance, without explanation, generate complaints.
### Test with a known trade
Compare a few fills in your terminal with your broker's prices at the same moment.

How should a prop firm simulate spreads and slippage?

Detailed answer

If you add costs

Test with a known trade

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