Symmetrically Weighted Four-Price FIR Filter

Summary

The FIR indicator is a finite impulse response filter that smooths an applied price using four observations with symmetric weights. Its calculation assigns weights of one, two, two, and one to the current and three prior price values, then divides the weighted total by six. The input can be selected through an applied-price parameter.

This compact weighted average can reduce short-term price variation while preserving a simple, fixed calculation. The document provides the formula but no comparison with other filters, parameter guidance, signal rules, or trading-performance evidence. It therefore explains the indicator’s construction, but does not show that it predicts returns or improves a trading strategy.

Key ideas

• The indicator is a finite impulse response price filter.
• It weights four consecutive price observations as one, two, two, and one.
• The weighted sum is normalized by dividing by six.
• The document gives no trading rules or evidence of predictive performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.