Noise or Strategy: Why I Don’t Chase Every Candle
The stock market is full of metrics and indicators: implied volatility, premarket VWAP, option deltas, opening auctions. These data points may seem important, but often they turn into noise. If a trader tries to react to every signal, they risk wasting nerves, time, and money without achieving consistent profits.
My Approach
I prefer a simpler system:
- Follow big money. Institutions and funds don’t make random bets. They have deeper analysis and the capital to move the market.
- Fundamental filter. Stocks should be promising: positive or improving margins, manageable debt, clear business model.
- Price evaluation. I look at P/S, EV/EBITDA, forward P/E. If the company is undervalued compared to the sector, the chances of growth increase.
- Exit strategy. Not on every noisy move, but when institutional sentiment shifts or the stock reaches fair value.
Why This Works
This is not about guessing reports or chasing gaps. It is a combination of value investing and smart money flow analysis. This method brings more calm and predictability: I buy undervalued and promising companies that attract institutional money, then I wait.
Investor Checklist Before Buying a Stock
Before entering a trade, I ask myself:
- Did big money (institutions, funds) enter this stock?
- How strong is the margin profile: is it profitable or at least improving?
- What is the debt situation: does the company live off its business or off loans?
- Valuation vs. sector: is the stock truly cheap or just looks like it?
- Does the company have a clear growth strategy (new products, expanding markets, partnerships)?
If most answers are “yes,” it’s not a noisy trade but a conscious investment.
Conclusion
The market will always be full of noise. But discipline and filtering signals help focus on what really drives price: fundamentals and institutional money.