What Is an Execution Leak in Trading

Execution Report Filed by #8675-309

An execution leak is the measurable difference between what your trading strategy would have produced and what your account actually produced. It is the cost of human overrides.

The Answer

An execution leak is the quantified gap between strategy performance and actual account performance. When a trader has a profitable strategy but still loses money — or makes less than the strategy should produce — the difference is the execution leak. It is caused by overrides: entering early, exiting late, moving stops, skipping valid signals, adding to losers, cutting winners short. Every override has a dollar cost. The sum of those costs is your execution leak.

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