There is no "noise" in the market
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    There is no "noise" in the market

    Hi there!

    We hear very often from technical analysts or from signal gurus, that we should avoid «noise» while trading.
    When something doesn’t suit our interpretation, we refer to that as «noise». Peter Steidlmayer, creator of Market Auction Theory, once said, that «market has no noise, and every movement on the market occurs to satisfy some market conditions»

    There are two ways to analyze the market:


    1. Filtering and «smoothing» information (you do it when apply moving average to your chart). Doing so, you expect to capture «real trend». You don’t want to over-complicate the process of trading and cut off some of the data. But also you cut off some nuances and anomalies that may tell you a different story.

    2. Trading like nuances are everything, greeting them. Athletes know that inches make difference between failure and success. If you don’t want to cut off nuances and anomalies, then probably you will need to use naked price chart or market profile (which is not indicator – it is data organization principle) in your trading.


    Here are some examples of how nuances can completely reverse your understanding of scenario.

    Here we have obvious sell signal for EURGBP according to simple trend-following system:

    eurgbp_robo1.jpg

    But if pay some attention to nuances, we will see that buyers are in control – sellers have very weak participation in this market - we’ve seen anomalies in volatility near highs (sellers are surprisingly passive near highs). This situation indicates some imbalance in the marketplace – we have no big (institutional) supply here, therefore buyers will be able to move this market up soon. It allows me to fade this meltdown, going long:

    EURGBP)robo.jpg

    I had just a few nuances that have completely changed the picture. I've captured quick profit here and now may decide whether to close it or let it run.

    robo3.jpg

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    Registered user dkarev's Avatar
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    to avoid the market one just need to avoid the lower time frame when trading,the lower time from form 1hr upward are more of noise trading and trading from 4h below has already Filter the noise in the market and that is why even the expert trader will advise newbies to trade the lower time frame to avoid noise trading in the market.

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    Quote Originally Posted by dkarev View Post
    to avoid the market one just need to avoid the lower time frame when trading,the lower time from form 1hr upward are more of noise trading and trading from 4h below has already Filter the noise in the market and that is why even the expert trader will advise newbies to trade the lower time frame to avoid noise trading in the market.
    Have you read my post?

    The head of the post is "there's no noise in the market", so I advocate for not filtering nuances and anomalies and taking everything into consideration.

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    Are you mixing noise with the moves which comes unexpectedly like 50-100pips in an hour on those pairs who daily average is 80+ pips?
    Well, these are mostly when really really high impact news releases like NFP, GDP , and any other really high impact newses.
    They really make a lot of movement if the news is very much negative or very much positive and thus effects all the pairs related to the news.
    I usually stay out of the market unless i find a good price action setup.

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    @ Value trader (Educator), According to your quote ''When something doesn’t suit our interpretation, we refer to that as «noise». Peter Steidlmayer'' In my interpretation on this, That means that there is noise in the market, but not all traders makes the noise since not all of use enters the market that we are not sure of. Yet, the ending is ''there is no noise in the market'', Is that really not complicating?

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    And we could said that on the market is always noise, or no noise, because the market price is result of many factors in the world. It is not just natural factor, but also speculation from big players or institutional traders. But in that many factors chaos , we could also find some model of movement of price. That is why i often suggest importance of watching the naked chart first.

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    Registered user Nizar's Avatar
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    Quote Originally Posted by Ema10 View Post
    And we could said that on the market is always noise, or no noise, because the market price is result of many factors in the world. It is not just natural factor, but also speculation from big players or institutional traders. But in that many factors chaos , we could also find some model of movement of price. That is why i often suggest importance of watching the naked chart first.
    the controversy of whether currency market is dominated by chaos or by well defined patterns is a continuous one,in my opinion i think the market is random and there is not certain factor that control it and all we have to do is to know how to deal with this randomness and employ it to our favor.

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    Registered user opan's Avatar
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    The market does not have a voice but the market remains active, we just met at the desk as well MT5 mt4 and other desk, this is proving us all traders are connected to each other. and of course our goal here is to make money as much as possible to live our lives

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    We are simple trader in forex market and market movement is not our control. Seller sell and buyer buy currencies which are reflecting in the chart. We can make some analysis through this chart whether the next movement will be up or down. But we cannot give any assurance as it depends on seller and buyer. Sometimes any news accelerates the market movement, so we need to follow the news always.

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    Quote Originally Posted by cozard007 View Post
    @ Value trader (Educator), According to your quote ''When something doesn’t suit our interpretation, we refer to that as «noise». Peter Steidlmayer'' In my interpretation on this, That means that there is noise in the market, but not all traders makes the noise since not all of use enters the market that we are not sure of. Yet, the ending is ''there is no noise in the market'', Is that really not complicating?
    It's not complicated. Every trader has his own idea of the market.
    Some traders refer to unwanted nuances as "noise", some pay much attention to them,

    I'm in the second group. I know, that market always tells us a story but we have to learn to read beyond letters :)
    We should learn to read nuances. It's not easy and straightforward, I know, but that what's trading is.

    Trading is about making decisions in the face of uncertainty, ambiguity and complexity.
    If you respect this environment, you are on the way to profitability

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