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Weighted Moving Averages

Weighted moving averages give current data more weight than older data, thereby reducing the significance of older prices. To do this, each price in a series is multiplied by the number of periods preceding it: the older the price, the smaller the multiplier.

Formula:

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Where:

n = number of bars

Pt = current price

Pt-1 = previous price

MAt = current moving average value

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

See also:

Weighted Moving Averages Function