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whose decisions to buy or sell are based on "factors they believe to be helpful but in reality will give them no better returns than random choices". These factors may include hype or rumor, which noise traders believe to be reliable signals of future returns, but which are actually forms of
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Noise traders often act irrationally: they tend to be emotion-driven, impulsive, reactive, and herd-like. The presence of noise traders in financial markets can cause prices and risk levels to diverge from expected levels even if all other traders are rational.
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Noise traders do not trade randomly; their decisions are systematic. However, their trading decisions are not based on professional advice or a business's
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DeLong, Bradford J.; Shleifer, Andrei; Summers, Larry; Waldmann, Robert J. (1990). "Noise Trader Risk in
Financial Markets".
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43:. Therefore, returns on their trading decisions are expected to be no better than random choices.
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that cannot be used to accurately predict the future value of a stock.
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126:"Noise Trader - Definition, Current Numbers, Impact"
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16:Stock trader who uses economic noise
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1029:This finance-related article is a
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504:Electronic communication network
187:The Journal of Political Economy
166:from the original on 2021-01-23
136:from the original on 2021-03-03
104:from the original on 2021-02-19
177:
156:"Noise Trader Risk Definition"
1:
498:Multilateral trading facility
1033:. You can help Knowledge by
921:Returns-based style analysis
717:Post-modern portfolio theory
623:Security characteristic line
7:
675:Efficient-market hypothesis
579:Capital asset pricing model
516:Straight-through processing
130:Corporate Finance Institute
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492:Alternative Trading System
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94:"Noise Trader Definition"
556:Arbitrage pricing theory
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835:Initial public offering
696:Modern portfolio theory
591:Dividend discount model
474:List of stock exchanges
57:Noisy market hypothesis
723:Random walk hypothesis
861:Market capitalization
670:Dollar cost averaging
681:Fundamental analysis
665:Contrarian investing
628:Security market line
533:Liquidity aggregator
510:Direct market access
421:Quantitative analyst
67:Behavioral economics
62:Quantitative analyst
926:Reverse stock split
871:Market manipulation
795:Dual-listed company
655:Algorithmic trading
585:Capital market line
387:Inter-dealer broker
966:Stock market index
805:Efficient frontier
744:Technical analysis
702:Momentum investing
524:(private exchange)
414:Proprietary trader
356:Shares outstanding
346:Authorised capital
41:technical analysts
1080:Financial markets
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567:Buffett indicator
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754:Value averaging
749:Trend following
734:Style investing
729:Sector rotation
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906:Public float
876:Market trend
866:Market depth
686:Growth stock
660:Buy and hold
569:(Cap-to-GDP)
409:Floor trader
399:Market maker
382:Floor broker
370:Participants
313:Golden share
308:Common stock
284:Third market
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168:. Retrieved
160:Investopedia
159:
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138:. Retrieved
129:
106:. Retrieved
98:Investopedia
97:
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37:fundamentals
34:
25:stock trader
21:noise trader
20:
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991:Uptick rule
971:Stock split
951:Squeeze-out
946:Speculation
891:Open outcry
780:Block trade
712:Pairs trade
1074:Categories
996:Volatility
976:Stock swap
896:Order book
647:strategies
573:Book value
441:Arbitrager
436:Speculator
170:2021-03-08
140:2021-03-08
108:2021-03-07
612:Fed model
607:EV/EBITDA
522:Dark pool
453:Regulator
298:Types of
264:Types of
941:Slippage
901:Position
886:Momentum
790:Dividend
469:Exchange
426:Investor
216:12112860
164:Archived
134:Archived
102:Archived
51:See also
830:Haircut
634:T-model
446:Scalper
266:markets
208:2937765
851:Margin
719:(PMPT)
581:(CAPM)
431:Hedger
404:Trader
377:Broker
300:stocks
214:
206:
1006:Yield
981:Trade
916:Rally
837:(IPO)
725:(RMH)
698:(MPT)
677:(EMH)
630:(SML)
619:(NAV)
593:(DDM)
587:(CML)
558:(APT)
551:Alpha
518:(STP)
512:(DMA)
506:(ECN)
500:(MTF)
494:(ATS)
212:S2CID
204:JSTOR
73:Notes
23:is a
1031:stub
841:Long
645:and
575:(BV)
562:Beta
196:doi
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