NOISE

["Mark Brown" <markbrown@xxxxxxxxxxxxx>]

I have traded the SP for a long time and I saw a comment that Perry Kaufman
made in his book Smarter Trading where he states that most any thing under a
one hour time frame is just noise.  I had never tried to think about a time
frame setting the threshold for noise, I had always considered volatility
and range to determine noise.  So I have been heading this rule of hourly
for a while now and it seems to be a viable theory.  I do not like specific
time frames in trading models rather I like to build models that use price
levels instead.  That way there is no need for a time frame, the decision is
made on something other than current price action.  This way I have no fear
of slippage, bad ticks, ect.  I have plenty of time to enter a market and it
works many times to my advantage if I'm slower on a fill.  I think once
noise and noise levels are identified a trader can get on with trading and
not worry about erratic moves that would disrupt an otherwise harmonic
market.

Mark Brown