Market Noise.

Noise is a disorderly move. It doesnt need to be volatile. just erratic and unpredictable.
When prices move from point A to point B in a straight line. there is little or no noise. When prices move with an erratic path. going up and down before reaching point B. there is noise.
Noisy markets should be traded with a mean reverting strategy – using oscillators. perhaps. Markets with low noise should be traded with trending methods – moving averages will work well here.
While it will never be possible to exactly determine when a market is exhibiting high noise and when it is exhibiting low noise. one simple method is to check price movements with moving averages. If moving average strategies are making money consistently. then the market has low noise. If a momentum oscillator like Rsi is catching the highs and lows in prices then we have a market with high noise – do not use trend indicators here.

Trading range again

The Nifty is back inside a trading range. The cycles of expansion and contraction are common to all trading instruments but the Nifty seems somewhat special. This index has a fairly regular process of range expansion which takes Nifty to a new price level. followed by many days of choppy market action.

Again. this cycle is repeating. A big expansion saw the Index move almost 280 points. after whi h we have the trading range Developing. This range seems to be 5500 – 5600. A move out of this range should seee big moves again.

Today. I am in Bhopal for an Et-now investor camp. Ic you live in the city. do come and meet. The event will also be broadcast live at 11 am.