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Thread: There is no "noise" in the market

  1. #1
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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. #1671
    Trader Azis Muslim's Avatar
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    Quote Originally Posted by touqir View Post
    when market is not moving up or down means it not have any volatility we should not trade, we should wait until we get some good signals, if we are getting good signals then we can trade, so in normal market we can understand its direction but in very slow we can not determine and market can move huge opposite as well, so a trader can get success just by good decisions always
    Market will always move up and down, there is not a single day we see market stay still without going anywhere to any levels. Indeed it may has slow movement but in the end it is still moving. More noises are there whenever market is moving in sideways and we need to know based from the patterns and our strategies when exactly market is stopping its trend and when will it continue so we can analyze market better with less noises.

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