Noise

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DEFINITION of 'Noise'

Price and volume fluctuations in the market that can confuse one's interpretation of market direction. Used in the context of equities, it is stock market activity caused by program trading, dividend payments or other phenomena that is not reflective of overall market sentiment. Also known as "market noise".

INVESTOPEDIA EXPLAINS 'Noise'

In general, the shorter the time frame, the more difficult it is to separate the meaningful market movements from the noise. Noise traders attempt to take advantage of market noise by entering buy and sell transactions without the use of fundamental data.

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