Noise traders trade on signals that they believe generate higher profits than random profits, however, this belief is not well substantiated.
The idea of the noise trader came from the notion that price action has “noise” that is not related to a reliable analysis signal about the price of a security.
Such perceptions have led to the controversial and overly simplistic notion that fundamental analysis is the true signal and technical analysis is just noise.
The best consideration for identifying noise trading is to understand the concept of the noise trader’s agenda.