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Identifying noise

 Discovering noise while investing is a very important step. Because we tend to make mistakes based on that. Even investing in a very promising company sometimes lead us to withdraw funds. This happens to all investments. How noises leads to bad decision could be narrated by everyday example. We must have seen that when the price of a certain assets go down, we have this urge to withdraw money. But what if it goes up ?. So we wait for couple of days further to see the assets going down. So we withdraw money instantly with half of our invested money in hand. But after the withdrawals we see the price going up and wait for few days for the confirmation. After confirming that it is in a bullish run, we invest. But after a few days of investment the prices shoots down again burning our capital.

This happens every time and we react same each time. By reacting to the markets this ways opens a wonderful opportunity to burn or capital in no less time. But when we zoom out the graph and inquire, we can see it is always on the bullish move and every time those dip happened was a lie and noise. So while investing identifying noise is really important to save our capital. And look at a long time frame certainly helps us to do that.

 

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