Mathemagician
Established member
- Messages
- 603
- Likes
- 130
Welcome and good luck!
Slippage is the difference between your hypothetical/intended fill price and your actual price. it's generally caused by the natural spread between the bid and ask (if the spread were zero, trades would be executed until it was >0).
Chop is the particular type of market behavior in which long-term winning traders tend to lose and long-term losing traders tend to win. Chop keeps the losing traders coming back to the table for more, thinking they've finally got it figured out, but in reality just continuing to donate.
OK, seriously, chop is a word used to describe the state of a market in the absence of a trend. It tends to chop up and down without establishing a clear direction. Obviously, a market can be choppy on one timeframe (e.g. daily) while trending nicely several times on another time frame (e.g. 1 minute).
jj
Slippage is the difference between your hypothetical/intended fill price and your actual price. it's generally caused by the natural spread between the bid and ask (if the spread were zero, trades would be executed until it was >0).
Chop is the particular type of market behavior in which long-term winning traders tend to lose and long-term losing traders tend to win. Chop keeps the losing traders coming back to the table for more, thinking they've finally got it figured out, but in reality just continuing to donate.
OK, seriously, chop is a word used to describe the state of a market in the absence of a trend. It tends to chop up and down without establishing a clear direction. Obviously, a market can be choppy on one timeframe (e.g. daily) while trending nicely several times on another time frame (e.g. 1 minute).jj
new_trader
Legendary member
- Messages
- 6,770
- Likes
- 1,655
Welcome and good luck!
Slippage is the difference between your hypothetical/intended fill price and your actual price. it's generally caused by the natural spread between the bid and ask (if the spread were zero, trades would be executed until it was >0).
Chop is the particular type of market behavior in which long-term winning traders tend to lose and long-term losing traders tend to win. Chop keeps the losing traders coming back to the table for more, thinking they've finally got it figured out, but in reality just continuing to donate.
jj
I suppose that's a very nice mechanical definition of choppy. Displaying a market in different timeframes doesn't alter it's partcipants does it? :idea:
firewalker99
Legendary member
- Messages
- 6,655
- Likes
- 612
Hi ! I am learning futures day trading the S&P 500 eminis market. I am undertaking a course and It has trading jargons which make me feel as if I am learning a foreign language.
What is a 'chop'?
How would define a 'slippage'?
Thank you for the help!
I've illustrated 'chop' by a chart. The green oval is a nice trend. The purple oval is chop: price goes up and down without apparent direction. It's best to avoid trading this, because the movement in either direction can cause you to lose money on short as well as on long trades. Chop is often defined as 'meaningless direction'.
If you know what a trend is and you know what a ranging market is, then the third option basically is chop.
new_trader
Legendary member
- Messages
- 6,770
- Likes
- 1,655
Hi ! I am learning futures day trading the S&P 500 eminis market. I am undertaking a course and It has trading jargons which make me feel as if I am learning a foreign language.
What is a 'chop'?
How would define a 'slippage'?
Thank you for the help!
Don't be confused by the charts!
Understanding who the participants are is more important. Once you understand the participants all this "chop" nonsense becomes meaningless in any timeframe, and as the Grand Master used to say, the right side of the chart just wafts obediently as predicted. Think of Occam's razor and The Pareto principle. Your trading will progress in leaps and bounds.
firewalker99
Legendary member
- Messages
- 6,655
- Likes
- 612
Don't be confused by the charts!
Understanding who the participants are is more important. Once you understand the participants all this "chop" nonsense becomes meaningless in any timeframe, and as the Grand Master used to say, the right side of the chart just wafts obediently as predicted. Think of Occam's razor and The Pareto principle. Your trading will progress in leaps and bounds.
gkum6089 asked what chop is, so I illustrated to him what it is.
Yes, understanding trading behaviour is more important than just identifying a pattern on a chart. But if he is following a course and having trouble with certain 'jargon', giving him more jargon or principles isn't exactly going to help him a lot...
new_trader
Legendary member
- Messages
- 6,770
- Likes
- 1,655
firewalker99
Legendary member
- Messages
- 6,655
- Likes
- 612
And so did you with your post.
Anyway, gkum0689, find your own truth in the chart.
And if you are looking for 'general definitions' this might also help:
Choppy Market
What you do with it and how you approach it, should only come later anyhow.
wasp
Legendary member
- Messages
- 5,107
- Likes
- 879
Don't be confused by the charts!
Understanding who the participants are is more important. Once you understand the participants all this "chop" nonsense becomes meaningless in any timeframe, and as the Grand Master used to say, the right side of the chart just wafts obediently as predicted. Think of Occam's razor and The Pareto principle. Your trading will progress in leaps and bounds.
Labels and jargon are just that. It should not be done. Every moment in the market is unique and a potential for profit. Look past what it is 'usually' described as X,Y or Z and look at what is happening and what the participants are doing. However volatile or not the market may be at the time, its all still about the players actions. Understand that and any market conditions are tradeable.
Glenn
Experienced member
- Messages
- 1,040
- Likes
- 118
gkum
Say you want to buy 3000 AAPL shares. The prices quoted are 189.50 to Sell and 189.52 to Buy.
You transmit your order.
1. There is a delay between you hitting the button and the order reaching the market. This can be exaggerated by the latency of your internet connection.
2. The speed of Order Execution through your broker to the Market Maker or Exchange can vary.
3. If the whole of your order cannot be filled immediately,then there will be another delay until it has been filled in one or more chunks.
During these delays, however small, the quoted Sell and Buy prices may have changed because other orders are in the system before you, influencing both the price and the spread.
So by the time you actually get filled, there might have been several small fills making up your order.
So for example you might get filled at an overall average price of 189.60 or 189.45.
The difference between the actual fill price and the price you were hoping to get (189.52) is the slippage.
Glenn