What is a choppy market

Choppy markets are the biggest threat to orderly trading. Traders know there are two market trends: Up and Down. When a clear trend is available, trading becomes easy and simple: go with the flow.

But, what happens when there is no clear trend? The absence of a trend is considered as a sideways market. In a sideways market once traders realize that markets are sideways, support is bought into and resistance is sold into. While trading is not as easy as it is in trending markets, at least there is a pattern.

The problem comes when markets are choppy and volatile.Choppy markets keep on changing between different states of trend, They are like a chameleon. A choppy market is actually an up, down market and then suddenly changes into the reverse. Soon after, the market changes again from up to down or down to up. In this way, the market misleads traders repeatedly.

A choppy market cannot be traded by any method. Surprisingly, many newcomers actually make money in choppy markets! This happens because they take trades without much thought and with considerable risk. In a choppy market, suddenly, their losing trade becomes profitable since the trend changes rapidly. It is another matter that newcomers end up losing all the gains and much more when markets become orderly and trending.

To sum up: A choppy market is a market condition in which trend changes rapidly and without any proper technical pattern. These changes keep on happening, causing the trader to lose on almost every trade he takes.