Imperfections of the market is the only driving force behind the price fluctuations. Other wise we would buy and hold stocks forever. The noise (all kinds of it) is responsible for very existence of a trader. But, of course, it is just my point of view and I will respect any other point of view expressed on this thread. Cheers,
My 2 cents: For the same data set, one system may produce lesser noises than another system, due to the design and the underlying concept/mindset of the system designer, providing the productive signals are the same (in terms of number and timing and else). The system of lesser noises generally would produce more profits (unless the claim that noises could increase profits is valid). To me, "Noise or imperfections are the only things that are tradable!" would be very hard to comprehend.
other way 'round: systems with less noise produce less profit because there is less pricing "discrepancy". a perfectly priced market would be completely untradable. prices would not move at all for long stretches of time - and then gap to somewhere else where they would again not move at all.
I dont know about tradable ( your meaning of it ) but using the example above had you positioned yourself in the direction of the gap ( up or down ) you would make money ( ie. tradable in my opiinion ) ..... no??? In fact the lack of 'noise' would make it quite easier to trade.....no??
Let's put it this way. As for the es as an example, the only consideration is the flow in favor with your position and if there's traffic up ahead... 25 basis is better than covering IB commish. No?
============================================== Ktmex-20 Some whose job includes trading ,say 5 minute noise & more or less noise , like specialists tend to do well; actually prefer less noise like @ end of day, @ end of month. Interesting a NYSE Bank manager also mentioned that business expression; at the end of the day.