Title: Noise
Headings: Noise
Noise
What Is Noise?
Key Takeaways
Understanding Noise
Noise and Time Frames
Causes of Noise
Having a System: The Alternative to Noise Trading

Content: When buying and selling stocks at a rapid, short-term pace, it can be difficult to distinguish "information" from "noise." Causes of Noise
There are market fluctuations that occur that usually tend to be noise. Intraday information typically causes short-term price fluctuations. More often than not–unless it's a major announcement or event–the trend usually remains intact once the noise settles down. Short-term volatility or price moves can be the result of program trading, which means that a large investment institution has programmed computers to make trades when prices reach a certain level. It's also advisable to be on the lookout for artificial bubbles, which are often created when many noise traders congregate their purchases around a single company or industry. Market noise can also lead to corrections or reverse movements of more than ten percent of the value of a security. These corrections are typically adjustments to a significant overvaluation of a security or index. Having a System: The Alternative to Noise Trading
Many traders create processes and rules for making trading decisions to help avoid noise.