cuotes
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tenbobtrader
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noise is the distance between your entry and your stop 
cuotes
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Absolute existence of non-thinking things
Trades do not spontaneously form without reason. Hume the philosopher once said “the absolute existence of non-thinking things is words without a reason”. Trades are generated for a reason by a human being directly or indirectly (via algorithms written by a human). There are, therefore, reasons for all trades varying from the highly emotional to so-called objective ones. This is perhaps the “purist” point of view.
Now for the practical point of view – I would define noise as that mass of trades for which a competent trader would find difficulty in finding structure, direction and mass reasoning. This difficulty would most likely arise from a lack of sufficient information or the time and resources to analyse the mass of detail in order to make rational prompt trading decisions.
Without being able to ascertain these things such trades would be untradeable, except for taking a punt and seeing how things worked out, which would carry a high degree of risk.
Any trader who has not reached a competent level will, for similar reasons, find it more difficult to find structure, direction and meaning in the data they are presented with, so they will personally experience more “noise”. This is why they should stick to higher timeframes at first, where structure is more easily ascertained.
Charlton
Trades do not spontaneously form without reason. Hume the philosopher once said “the absolute existence of non-thinking things is words without a reason”. Trades are generated for a reason by a human being directly or indirectly (via algorithms written by a human). There are, therefore, reasons for all trades varying from the highly emotional to so-called objective ones. This is perhaps the “purist” point of view.
Now for the practical point of view – I would define noise as that mass of trades for which a competent trader would find difficulty in finding structure, direction and mass reasoning. This difficulty would most likely arise from a lack of sufficient information or the time and resources to analyse the mass of detail in order to make rational prompt trading decisions.
Without being able to ascertain these things such trades would be untradeable, except for taking a punt and seeing how things worked out, which would carry a high degree of risk.
Any trader who has not reached a competent level will, for similar reasons, find it more difficult to find structure, direction and meaning in the data they are presented with, so they will personally experience more “noise”. This is why they should stick to higher timeframes at first, where structure is more easily ascertained.
Charlton
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I would say noise is the by-product of human interaction, interference in the markets, price finding itself, emotional trading, creating opps etc in the markets when price inexorably moves from major point A to major point B
GammaJammer
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short term, erratic price fluctuations, unsupported by a meaningful accumulation of volume, and unrelated to the greater themes at play, be they structural, fundamental technical, context etc. High movement to spread ratio.
That work as a definition? (it's basically what I think about it - volume is definitely key to it all)
It's actually a pretty good question (as is the one ;what is a trend that has ben asked in another thread). While there is more than one interpretation of the answer, that doesn't follow that everyone's view, however odd, is correct however.
Good thread though - would like to see more of these.
That work as a definition? (it's basically what I think about it - volume is definitely key to it all)
It's actually a pretty good question (as is the one ;what is a trend that has ben asked in another thread). While there is more than one interpretation of the answer, that doesn't follow that everyone's view, however odd, is correct however.
Good thread though - would like to see more of these.
GammaJammer
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Incidentally, the reason I say volume is important is that if the price isn't really going very far, but huge volume is being traded, this is a two way battle, and eventually the odds are one side or the other is going to move, and at that point positioning may well be very high, increasing the likelyhood that any range breakout is significant.
Less likely if there's been no volume traded imho.
Less likely if there's been no volume traded imho.
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GammaJammer
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Opened another door for me there
Well look at Tar's post earlier in this thread (#13). Saying essentially the same thing (re ATR). So credit tar, not me....
Well I think based on the fact that I talk about movement / spread ratio then essentially we're talking about short term price fluctuations. Doesn't mean that a fundamental, long term investor with a time horizon of months to years doesn't look at a daily chart and see anything but noise, it just means that there's a limit to how far we can realistically drill down on this stuff.
karl6666
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noise is pips
Its called noise, but surely its still movement of money. Its 'horses for courses'
I was trading 'noise this afternoon'
Very small times, broker - IB,
US/JPY
0.5 - 1 pip spread.
And bagged 50 pips in an hour. Yes there is the spread. But forget that and look at the profit and loss for the day end.
Would you be unhappy because you paid 50 pips to make 400. Im not because I like to watch the pot growing bigger and bigger, scalping 5 -20 a trade.... Swing traders blow their socks off for 200 pips and have to wait days to do it
I trade the noise. I want money and I want it fast, thats my style. If the noise goes the wrong direction, Im out. I trade. Buy and sell. Thats the name of the game. Profit.
K
Its called noise, but surely its still movement of money. Its 'horses for courses'
I was trading 'noise this afternoon'
Very small times, broker - IB,
US/JPY
0.5 - 1 pip spread.
And bagged 50 pips in an hour. Yes there is the spread. But forget that and look at the profit and loss for the day end.
Would you be unhappy because you paid 50 pips to make 400. Im not because I like to watch the pot growing bigger and bigger, scalping 5 -20 a trade.... Swing traders blow their socks off for 200 pips and have to wait days to do it
I trade the noise. I want money and I want it fast, thats my style. If the noise goes the wrong direction, Im out. I trade. Buy and sell. Thats the name of the game. Profit.
K
Noise and sensible risc appetite
I like this because it opens the door to an alternative view on noise.
for instance you are an intraday trader.
you play the classical 10, 5 or 1 min candle/bars.
there are a more traders just like you out there if your market has any liquidity.
central: what is your esstimate of the smallest reasonable stopsize a "knoweable" intraday trader should be able to use in your niche.
If you plot the rangecandle of that efficient stoplevel you will only have vertical movement on your chart and you have filtered a big chunck of the "noise" beyond the efficient traders risk appetite.
in attachment I estimate the efficient stop level = 3 cents.
http://www.sierrachart.com/userimages/upload_2/1249574577_70_UploadImage.png
noise is the distance between your entry and your stop
I like this because it opens the door to an alternative view on noise.
for instance you are an intraday trader.
you play the classical 10, 5 or 1 min candle/bars.
there are a more traders just like you out there if your market has any liquidity.
central: what is your esstimate of the smallest reasonable stopsize a "knoweable" intraday trader should be able to use in your niche.
If you plot the rangecandle of that efficient stoplevel you will only have vertical movement on your chart and you have filtered a big chunck of the "noise" beyond the efficient traders risk appetite.
in attachment I estimate the efficient stop level = 3 cents.
http://www.sierrachart.com/userimages/upload_2/1249574577_70_UploadImage.png
Last edited:
