Chop and Slop
Steering Clear of Market Traps
Avoiding Chop and Slop
Traders do have some funny nicknames for stuff.
- Dead cat bounce
- Face ripping short rally
- Big swinging d*&k size
All pretty descriptive!
Another one is chop and slop (Or slop and chop depending on who you speak to…) Generally used when the market is directionless with no real trend or tradable move between ranges. Often you get what I call “dirty candles”, a mixture of red and green seemingly randomly.
This is your worst nemesis as a trader.
Many times we don’t realise we’re in this until it’s too late. We look back at the executions on a chart and wonder what the hell we were doing. It’s especially dangerous if you’re an active day trader or scalper.
One minute you can be going from a nice opening rhythm and the next you’re caught in an hour of “bleurgh”
Today, think about how you can avoid getting sucked into markets you don’t want to be trading.
For most of us day traders, that’s chop and slop.
Telling yourself not to get involved in the chop isn’t enough.
Just like in my recent ‘Sirens’ podcast episode, think about doing something extra to help keep you from getting seduced by meaningless price moves.
Some ways to help avoid getting caught in chop:
- Set an alarm for times you know the volume starts to wind down.
- Put a platform alert on a low ATR
- Use another indicator to help guide you – ROC, BB width
We all have access to a nice selection of technology and tools to trade with.
You might be a die-hard price action trader but you can still use these tools as a filter to help you be more intentional with your focus. Just do whatever you need to do to avoid chop and slop.
Get Smarter About Trading
Join 5,000+ traders who subscribe to our Traders Mastermind daily email. Designed to help you cultivate discipline, momentum and consistency in less than 3 minutes per day.
The Market's Call
I don’t usually link to my own podcast in the resource of the day, but I did have fun with this one and it’s right on topic!
Check it out: Traders Beware: The Market’s Seductive Call