NoiseTrader: How I Separate Signal from Noise

Discussion in 'Strategy Development' started by NoiseTrader, Apr 11, 2006.

  1. My most reliable filter is a calculation
    I call the Bid Line (or the Offer Line). It indicates a potentially ideal trade location for V-trades (variant perception based trade setups).

    This is where value buyers are willing to step in and offset the offers of momentum sellers selling into weakness.

    I measure this in various timeframes. The Daily Bid line for the SPY and MDY are now breaking down indicating a change in market character and the potential for a more extended move down.

    At the same time, the Daily Bid lines for the SMH and QQQQ have not broken down, and today’s (4/11/06) mini-selling climax) has pushed prices down into a price areas where value buyers can offset offers in SMH and QQQQ.

    This leads to two trading scenarios. I've posted extended notes and the charts charts here...

    I have a lot of professional traders and floor traders who read my daily notes which you can download below...
  2. Hmmm... the composition of noises lead to sound...
  3. Summary of article: the market may go down, or it may go up.

    Thanks for sharing.
  4. Thanks for that. I read the manifesto which, IMHO, is very much worth a read - I take it the pseudo dungeons and dragons theme is your passion!?!?!?!

    Good luck.
  5. Thanks Wood I'm glad you found it useful, the better part IMO is translating the analysis into action, and if you look closely at the portfolio in the PDF below...we've nailed important lows in Gold., Corn and stocks etc with no drawdown and hardly any outright losses.

    I'll send you my nightly notes, just go to my blog at
    and enter your email in SEND BUY LIST
  6. "How I separate signal from noise" is to use proprietary indicators called the B line and the O line. But I'm not going to tell you HOW these indicators are constructed. That's proprietary.
  7. Although I never use outside influence to make my decisions I can wholly appreciate a fresh approach.

    Be upfront with everyone here and you should be OK.

    Good luck.
  8. There is no noise. It is all signal.
  9. Sorry...I'll put together a series of posts in days ahead fleshing this out al ittle bit better...
  10. In the interim you can download the Excel files with the trade I''ve been posting (and trading) in live markets and in a Yahoo conference in my trading group.

    Come trade with me for a while and see for yourself -- the markets are the final arbiter of what works and wwhat doesn't.

    I'll gladly send you or anyone interested my daily trading plan. Just go to my weblog at: And select the "BUY LIST" icon.
    #10     Apr 12, 2006