Noise is a disorderly move. It doesnt need to be volatile. just erratic and unpredictable.
When prices move from point A to point B in a straight line. there is little or no noise. When prices move with an erratic path. going up and down before reaching point B. there is noise.
Noisy markets should be traded with a mean reverting strategy - using oscillators. perhaps. Markets with low noise should be traded with trending methods - moving averages will work well here.
While it will never be possible to exactly determine when a market is exhibiting high noise and when it is exhibiting low noise. one simple method is to check price movements with moving averages. If moving average strategies are making money consistently. then the market has low noise. If a momentum oscillator like Rsi is catching the highs and lows in prices then we have a market with high noise - do not use trend indicators here.
S2 Analytics Pvt Ltd
Search This Blog
to happiness is not being rich; it's doing something ardous and creating something of value and then being able to reflect on the fruits of your labor.
Arthur Brooks, The Battle
▼ 2011 (202)
- ► November (11)
► October (28)
- Answers to comments oct31-11
- Process of Consolidation Likely
- Nifty Pattern Targets Reached
- Happy Diwali
- Stock Selection (based upon their historical volat...
- M&M Consolidation
- Niftnear ORB Trade
- A dip in an ongoing up trend
- TATA Motors Life Cycle
- Hindalco touches support
- Mystery of the missing trailing stop
- Nifty Live Oct 12-11
- Point and Figure Charts
- Aiming for a better trade
- Long term view of Nifty
- Zen stories for Traders
- Hero Motor Corp at its support level
- NR 7 in Nifty Weekly Chart
- trading with a gap open
- Silver Pushes against Resistance
- An unusual continuation pattern in the Nifty
- Sudden Rally
- Nifty at 4750
- There is a time to be old and a time to be bold
- Afternoon review
- Nifty - Long Term View
- Higher High - Higher Low pattern in CNX IT
- Bear market shows its strength
- ► September (53)
▼ June (23)
- Two different positions
- Moving steadily down
- Markets in slow downtrend
- Market update video
- Why I suggested the momentum is up
- Eye of the Bird
- Paul Tudor Jones - A remarkable Trader
- Cycles of Expansion and Contraction
- The principle of Confirmation
- Interviews with Technical Traders
- Stock Life Cycles - More
- Define your Risk
- An Intraday trade in Nifty
- Bullish pattern in Powergrid
- Markets: Is any pattern absolute?
- Nifty - current location in its life cycle
- Market Noise
- Trading range again
- Silver and the Double Fear Trade
- Sudden change of sentiment in U.S. markets
- Problems of plenty - The Technical Analysis popula...
- Bits of News June1-11
- ► 2010 (263)
- ► 2009 (293)
- ► 2008 (219)