Houndred point noise

[powerhungry]

I figure all currencies have atleast hundred pip noise. That means you have to put about a 200 pip stop everytime because it is impossible to play the noise... YES it is noise.

I use about a 200 pip stop I do make a profit but it uses much of that 200 pips everytime.

Although if your going to set the stoploss at 200 pips you have to set your limitprofit to atleast 300 be prepared to stay in it for about two weaks.

[mishak]

Hi PowerHungry
Good topic to discuss

What should we call the noise ?
Smth that prevents us to detect the signal we are looking for;
Smth that happens chaotically or unexpectedly;
Smth that changes its directions very frequently moves without any favourite way;
Smth we can not explain.
Or should we call it the interference

Speaking about major currency ps we are dealing with 200 pips movement does not look like the noise for me.
We usually call it "correction of the major trend" - so we have explanation to it.
It usually take a couple days for the currency to go 200 pips - it is not frequent for me (I am a swing trader).
We usually expect the correction we have special TA tools - oscillators - to detect it.
However I agree that 200 pips movements may confuse us when we are following principal monthly trend.

The difference between the interference the noise is that we can filter the interference out with some kind of filters.
The (white) noise can not be filtered out because it does not contain any information by itself no regularities in it.

What do you think?

[powerhungry]

"What should we call the noise ? "

Noise is anything that goes further in BOTH directions in a given period of time then your willing to lose.

[mishak]

If you look so on the "market noise" I have a recipe (a method)for you:

Just reduce your leverage.

200 pips (without leverage) is approximately 2% profit or loss.
2% loss for couple of weeks (as you say) looks very sustainable for me.
Well if you use leverage 1:10 it comes to 20% loss - very painful I guess.

How to reduce leverage ? Add money to your account or use smaller lots.

With $10000 account size you may trade one mini-lot (one open position at any moment) use no leverage.

Open forex position for 2-3 weeks is a very wise decision position trader's style.

It is not matory to use leverage on forex