1. A method of building a model for a physical plant in the presence of noise comprising: (a) initializing the model of the physical plant, wherein the model is characterized by a parameter vector; (b) estimating outputs using the model; (c) computing a composite cost comprising a weighted average of a squared error between the estimated output from the model and an actual output of the physical plant, and a squared derivative of the error; (d) determining a step-size and a model update direction; and (e) updating the model of the physical plant, wherein said updating step is dependent upon the step size.