Market noise

In financial markets, noise can include price fluctuations that distort the overall trend.

A wealth of news and information on volatility allows investors to discern what is happening in the market. Affected by market noise, investors found allotment of shares very challenging.

How to deal with market noise?

Many traders create processes and rules for making trading decisions to help avoid the noise. These traders establish pre-set risk and reward parameters.

With a trading plan, investors can decide how to act according to the plan. Traders who know what they're looking for are less likely to be swayed by noise than traders who rely on news or other fluctuations.

However, investors who don't have a trading process to make decisions are more susceptible to noise trading.