This is an interesting piece on the concept of noise as a source of errors and explain how it is distinct from bias, aimed at making better decisions
I haven't read this in full, just a quick skim. But it looks like it could be useful so I'm posting it up on this quiet Asian session.
- Humans are unreliable decision makers; their judgments are strongly influenced by irrelevant factors, such as their current mood, the time since their last meal, and the weather
- We call the chance variability of judgments noise.
- A firm whose employees exercise judgment does not expect decisions to be entirely free of noise. But often noise is far above the level that executives would consider tolerable-and they are completely unaware of it.
(for "firms" and "companies", of course, replace with "traders")