Unknown Indicator

A four-period moving average forecast model for price is based on an artificially constructed daily price series in which the value for a given day is replaced by the mean of that value and the values for four preceding and succeeding time periods. This model is best suited to forecast equities with high volatility.
The four period moving average method has an advantage over other forecasting models in that it does smooth out peaks and troughs in a set of daily price observations of equity instruments. However, it also has several disadvantages. In particular this model does not produce an actual prediction equation for price and therefore, it cannot be a useful forecasting tool for medium or long range price predictions

4 Period Moving Average In A Nutshell

The perks of being able to navigate the short term is that you can easily begin to read the movements and when they get to far from the short term moving average, you could look for a quick sell or buy, depending on the direction. Another perk is that you will get a feel for every bump in the road and can make a quick decision to capture the short term news play or technical analysis that could indicate a quick move. If a gap up or down were to occur, this could be a good way to gauge where the market average is in the short term.

Some of the disadvantages are that it will not be a good tool for people who are long term investors. The simple reason is it does not include enough data to give you a reliable long term opinion. Secondly, it does pick up many of the day to day movements which may not be of interest to many investors. Lastly, it does not represent the company as a whole and what it is capable average wise. Taking only a short set of data will not give you the well rounded marks needed to make money in the long term.

There are many different moving averages and for this one, we are going to take a look at the 4 period moving average. The 4 period moving average simply takes a look at the four periods previous to give you an average line. This type of moving average is quick and does not give you a whole lot of data for the person that is investing long term. However, if you are a day trader or an extremely short term investor, this could help you navigate the more volatile markets.

Closer Look at 4 Period Moving Average

Be sure to play with the moving average on a demo account and decide if this is the right fit for your investing and trading needs. Certainly you can change the distance of the moving average, but this specific example includes the 4 period moving average. Be sure to read about how the tool and data points work and if you still have questions, reach out to an investing community and bounce ideas off one another to help narrow you selection.

Trending Themes

If you are a self-driven investor, you will appreciate our idea-generating investing themes. Our themes help you align your investments inspirations with your core values and are essential building blocks of your portfolios. A typical investing theme is an unweighted collection of up to 20 funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of equities with common characteristics such as industry and growth potential, volatility, or market segment.
Cleaning Idea
Cleaning
Invested over 100 shares
Macroaxis Index Idea
Macroaxis Index
Invested few shares
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

Other Complementary Tools

Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
CEOs Directory
Screen CEOs from public companies around the world
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios