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Thread: 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:

    Attachment 1382

    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:

    Attachment 1383

    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.

    Attachment 1384

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  2. #1641
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    Quote Originally Posted by layigold View Post
    Honestly my friend , each time frame on trading platform has its own level if significance and area of usefulness . The choice of trader's time frame depends on the trading style he has chosen and the trading strategy he has developed for himself . As for me , I prefer using daily and 4 hourly chart to analyze the market and that is really working well for me but that does not mean that anybody who does not make use of the same cannot do well in trading . Every forex trader should go by what he is well comfortable with
    hard to tell people about something they don't or haven't understand yet because each traders has their own mindset about things. we can actually tell and focus to our own efforts to increase our accuracy with our strategy. market has its own noises which sometimes may give us misleading signals if we don't make further evaluation and validations. avoiding market noises usually using high time frames and you already mentioned 2 which i think they're pretty common for traders.

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    Most erratic moves seen on the lower time frames of the chart are nothing but market noise and that has been the reason why so many beginner traders go wrong way as a result if taking wrong decision by following the noise . Trading on higher tome frames only reduces the noise and that does not mean that noise can be completely eliminated . A market that is stationary is the one that has no noise and I doubt if there is any market like that . If you want to avoid confusion that comes along with the market noise , let the market dictate the tunes while you just follow suit

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  4. #1643
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    market not always be noisy but some time it can be so whenever market make volatile move i think we should avoid trade on that time, in volatile move it can move opposite it can change candle pattern and all things, some time in single day it can move 200 300 pips so its big loss, we must need to avoid it and we should trade when we are sure about it

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    Quote Originally Posted by touqir View Post
    market not always be noisy but some time it can be so whenever market make volatile move i think we should avoid trade on that time, in volatile move it can move opposite it can change candle pattern and all things, some time in single day it can move 200 300 pips so its big loss, we must need to avoid it and we should trade when we are sure about it
    It is not possible for the market to be noisy all the time, but that does not stop the truth that the market is noisy at times. Especially the lower time frames, traders have to get ready for the noisy market, that is the reason for me to try as much as possible to be trading with the larger time frame alone. The traders of the larger time frames will make much of good results with it due to the low level of noise when they analyse that charts.

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  6. #1645
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    Market is noisy all the time but traders get used to the noise and not notice it. Filtering can be using higher time frames or filtering can be in the head of trader as he starts to count in 1 pip and do not notice the part of pips. But personally I do not see any problem in the market noise maybe I get used to it and I do not pay attention to it.

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    Rookie Silhouette's Avatar
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    Quote Originally Posted by Krosneles View Post
    Market is noisy all the time but traders get used to the noise and not notice it. Filtering can be using higher time frames or filtering can be in the head of trader as he starts to count in 1 pip and do not notice the part of pips. But personally I do not see any problem in the market noise maybe I get used to it and I do not pay attention to it.
    Every moves market creates in chart has their own definitions which can be used and analyzed properly with suitable strategies. I won't tell market has that plenty noises because sometimes I can use them for my trading and make profits. After all, market just creates their prices and patterns based on market participants and news.

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  8. #1647
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    Quote Originally Posted by Silhouette View Post
    Every moves market creates in chart has their own definitions which can be used and analyzed properly with suitable strategies. I won't tell market has that plenty noises because sometimes I can use them for my trading and make profits. After all, market just creates their prices and patterns based on market participants and news.
    yes in chart we can earn also but in trading we must need to work on proper technical, candles are also important for us if we understand them but it move in different sides in different situations if we have good enough experience we can earn otherwise we can lose just, market is easy and simple if we follow but for this we must need of technical and fundamental both, one type is also not enough i think

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    Quote Originally Posted by naeem555 View Post
    yes in chart we can earn also but in trading we must need to work on proper technical, candles are also important for us if we understand them but it move in different sides in different situations if we have good enough experience we can earn otherwise we can lose just, market is easy and simple if we follow but for this we must need of technical and fundamental both, one type is also not enough i think
    We can watch our charts and keep quiet until we come across an understandable setup, we can correlate different timeframes to for better confirmations. Lower time frames are very noisy because they only give a view of the small part of the market movement while we remain ignorant to the major market trends and sentiments. looking at the lower time frames is like looking at the tip of the ice berg and taking the decision.

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  10. #1649
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    Quote Originally Posted by Abhishekwala View Post
    We can watch our charts and keep quiet until we come across an understandable setup, we can correlate different timeframes to for better confirmations. Lower time frames are very noisy because they only give a view of the small part of the market movement while we remain ignorant to the major market trends and sentiments. looking at the lower time frames is like looking at the tip of the ice berg and taking the decision.
    market is full of surprise we must have additional plans for our immediate trade in case if our primary setup wasn't going alright. noise in market sometimes visible and invisible depending on the patterns and volatility market has. i trade with news, doesn't mean i take a trade into every news i see. no i don't do that because i only trade once i see less noise in market and i can fully use my strategy to increase my winning potential. if market has bigger potential of noise then i'll leave it, even it's high impact news.

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  11. #1650
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    Quote Originally Posted by Sascha View Post
    market is full of surprise we must have additional plans for our immediate trade in case if our primary setup wasn't going alright. noise in market sometimes visible and invisible depending on the patterns and volatility market has. i trade with news, doesn't mean i take a trade into every news i see. no i don't do that because i only trade once i see less noise in market and i can fully use my strategy to increase my winning potential. if market has bigger potential of noise then i'll leave it, even it's high impact news.
    The setups that we are trading has to do with our strategy and then a strong back up plan can take care of the remaining things to ensure smooth trading experience. Surely market can be very cruel towards our mistakes and so every cent of profit is our hard earned money that comes through our planned actions. It is not that always we can find an opportunity to trade, some times things might get beyond our comprehension, better to not touch the market such time.

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