Noise trader (nonfiction): Difference between revisions
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* [[Crimes against mathematical constants]] | * [[Crimes against mathematical constants]] | ||
* [[Gnomon algorithm]] | |||
* [[Gnomon Chronicles]] | |||
* [[Noise trader]] | * [[Noise trader]] | ||
== Nonfiction cross-reference == | == Nonfiction cross-reference == | ||
* [[Noise (nonfiction)]] | |||
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[[Category:Nonfiction (nonfiction)]] | [[Category:Nonfiction (nonfiction)]] | ||
[[Category:To do (nonfiction)]] | |||
Latest revision as of 08:25, 17 June 2019
A noise trader also known informally as idiot trader, is a stock trader whose decisions to buy, sell, or hold are irrational and erratic.
The presence of noise traders in financial markets can then cause prices and risk levels to diverge from expected levels even if all other traders are rational.
In finance, noise obtained a formal definition in a 1986 paper by Fischer Black: "Noise in the sense of a large number of small events is often a cause factor much more powerful than a small number of large events can be."
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Fiction cross-reference
Nonfiction cross-reference
External links:
- Noise trader @ Wikipedia