Many trading challenges are embedded in the language we use to describe markets.

Among the most common things I hear from traders is that markets are difficult to trade because they are "choppy" and "noisy". What, precisely, does this mean?

A clue to the meaning is that we never hear the opposite. When was the last time you ever observed a trader high-fiving because markets were "smooth" and "predictable"? When have you heard someone making money attribute profits to market "noise"?

Yet another clue to the meaning is that very few traders actually measure market choppiness/noise. It's not that noise and signal are part of an explicit trading framework; rather choppiness is used as a reason to either explain losses or to not trade at all. From that perspective, a choppy market is one that cannot be successfully traded. It's the market equivalent of playing in a casino where the game is severely rigged against the gambler. Perhaps that is why so many conversations that start on the topic of market chop veer onto the topic of "algos" and their "manipulation" of markets.