**Formula**:

**Where**:

n = number of bars

MAt = current moving average value

MAt-1 = previous moving average value

Pt = current price

This method is convenient because it is not necessary to keep track of all past components of the average. Only the last moving average value and the new price are necessary for the calculation (keep in mind that study calculations used to be done by hand). Because of the simplicity of this calculation, the modified moving average is used extensively for internal calculations in other analyses.

see, P. J. Kaufman, The New Commodity Trading Systems and Methods, New York: John Wiley & Sons, 1978, pp. 58-64.

See also: