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Thanks Mark for changing the subject to something more interesting.
Let's start with basic definitions. According to Uncle Bob Brickey,
signal is any information that helps you make sound trading decisions.
Noise is everything else. So, RJP is right that one man's signal may be
another man's noise.
To a long term position trader, the small wiggles like on your chart
would probably be noise (filter out the high frequencies). To a pit
local, the knowledge that the stock market has been in an up trend since
1900 is probably noise (filter out the low frequencies).
Uncle Bob has presented some interesting mathematical proofs about how
quickly too much information taints your ability to make decisions
(separate the signal from the noise). Our goal should be to trade with
the absolute minimum of information that lets us make good decisions.
Less is more.
IMHO.... :-)
--
Dennis
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