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: Some noise traders attempt to take advantage of market noise by entering buy and sell transactions without the use of fundamental data. A longer time frame can provide a clearer picture of a trend. For example, a stock might swing wildly on earnings news for a few hours. However, when comparing that price movement to the trend over the past few months, the earnings move might be small relative to the overall trend. Only hindsight provides assurance of the credibility of information and whether the recent news or events will impact the trend. 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.