Slippage is defined as being the difference in pips between the order price and the execution price for a particular transaction.
Say you ordered to buy 1 lot of EURUSD at the Market Price of 1.3050. The order was sent out through MetaTrader to the liquidity provider and then the confirmation message comes back informing you that your order was executed at 1.3055. You have then a slippage of 5 pips. This can usually happen due to network speed problems and high market volatility.The default value for the slippage input is 3 and it is measured in pips. Having this option set to 3 would not allow the previous mentioned operation to open the buy order since the slippage would be higher than the value set (5 > 3).