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"Market Noise"

"Market Noise"

Richard Krivo, Trading Instructor

 Instructor’s Response:

 
“Market Noise” refers to the very random price action that occurs on lower time frame charts.
 
Take a look at the 5 minute chart below…
 
chart 6 23 10
 
Each 5 minute candle reflects all the trades that were made during that 5 minute period. Since the time frame is so short, oftentimes no discernable trading pattern can be identified. As a trader moves to larger and larger time frames, the price action will be less random and, therefore, “Market Noise” will be less and less a factor.

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