What is market noise in the forex market?

Market noise refers to random fluctuations in price and volume that can cause traders to divert attention from the true trend of the market. It can be fundamental news with limited ongoing market impact, or meaningless short-term price and volume activity that confuses interpretation of technical indicators and market trends.

Markets always tend to develop in one of three directions: up, down, or within a narrow range. And the most successful traders will be those who can identify and follow market trends. The market does not always show a clear trend, more often it is in a range. This makes it more difficult to judge the direction of the currency and detect future trends.

Traders often look at chart patterns as a starting point for identifying market trends. But most chart patterns tend to show numerous price movements, making it difficult to identify the beginning and end of a trend. Market noise is typically represented by minor market corrections on chart patterns or intraday volatility on short-term time frames. In sideways market corrections, price data is more of a distraction and often distorts the underlying trend.


Source: Daily Forex Rebate http://www.dailyforexrebate.com

Linkback: https://www.forex.zone/forex-advertisements/9/what-is-market-noise-in-the-forex-market/3994/