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.

Explore Investing Opportunities

You can quickly originate your optimal portfoio using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

Did you try this?

Run Idea Breakdown Now

   

Idea Breakdown

Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
All  Next Launch Module
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

Other Complementary Tools

Transaction History
View history of all your transactions and understand their impact on performance
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go