Noise Traders in Australia: Market Impact & 2025 Insights

For most Australians, the sharemarket can feel like a wild rollercoaster—especially in recent years, where sudden swings and unexpected trends have become the norm. Behind much of this volatility lies an often overlooked player: the noise trader. In 2025, as retail trading surges and social media amplifies market chatter, understanding the role of noise traders has never been more crucial for anyone looking to build wealth or simply protect their savings.

Who Are Noise Traders—and Why Should You Care?

Noise traders are market participants who make investment decisions based on sentiment, rumours, or misinterpreted information, rather than careful analysis of fundamentals. Unlike informed or institutional investors, noise traders may follow trends, react to headlines, or simply act on ‘gut feeling.’ Their actions can drive prices away from their true value, creating both risks and opportunities for other investors.

In 2025, the rise of online trading platforms, TikTok finance influencers, and instant news cycles has turbocharged noise trading. The impact is seen in:

• Short-term price swings: Sudden surges or crashes in ASX-listed stocks, often unrelated to company news or earnings.
• Increased volatility: Broader market indices experiencing sharper movements, challenging traditional risk models.
• FOMO and herd behaviour: Retail investors piling into ‘hot’ sectors like lithium, AI, or small-cap miners based on buzz rather than balance sheets.

The 2025 Landscape: Policy, Technology, and the Noise Trader Boom

Several factors in 2025 have magnified the influence of noise traders on Australian markets:

• Zero-commission trading: Platforms like Superhero and Stake have further lowered the cost barrier, enticing more first-timers into markets.
• ASIC’s digital engagement crackdown: The Australian Securities and Investments Commission (ASIC) ramped up efforts this year to police misleading financial content on social media, but noise-based speculation remains rampant in forums and group chats.
• Macro uncertainty: With ongoing global interest rate adjustments and Australia’s own inflation debate, uncertainty drives more speculative trading as investors seek quick wins.

As a result, noise traders aren’t just a minor annoyance—they’re now a market force. For example, the wild price action in small-cap tech stocks after a single viral TikTok post in March 2025 demonstrated just how quickly sentiment-driven trades can move the market, even if the underlying companies hadn’t changed a thing.

What Does This Mean for Savvy Investors?

For long-term investors and superannuation savers, the rise of noise traders presents both a risk and an opportunity:

• Short-term mispricings: Shares may become temporarily over- or undervalued, creating opportunities for patient, research-driven investors to buy quality assets at a discount.
• Heightened volatility: Portfolio values may swing more wildly. Reviewing your risk tolerance and diversification is essential in this climate.
• Behavioural traps: It’s easier than ever to get swept up in market hype. Tools like automatic investment plans and regular portfolio reviews can help maintain discipline.

In 2025, some fund managers are even launching ‘anti-noise’ ETFs, designed to filter out stocks with excessive retail-driven volatility. While these are still new to the ASX, they highlight the growing awareness—and potential strategies—for dealing with the noise trader phenomenon.

How to Protect Yourself and Thrive

Whether you’re a seasoned investor or just starting out, here’s how to navigate a market increasingly shaped by noise traders:

• Focus on fundamentals: Make decisions based on company earnings, balance sheets, and future prospects—not social media trends.
• Be wary of FOMO: If everyone is talking about a stock or sector, pause and ask if the underlying story stacks up.
• Diversify: Spread your investments across sectors and asset classes to buffer against unexpected swings.
• Use limit orders: Especially in volatile markets, setting price limits can protect you from sudden price spikes or drops.

Australia’s financial regulators are watching the rise of noise traders closely in 2025, but ultimately, individual discipline and a focus on real value remain the best defense against market noise.