Question

In: Statistics and Probability

Moving average and weighed moving average. Report your findings

Moving average and weighed moving average. Report your findings

Solutions

Expert Solution

Moving averages are favoured tools of active traders to measure momentum. The primary difference between a simple moving average, weighted moving average, and the exponential moving average is the formula used to create the average.

simple moving average (SMA)

A moving average is a technique to get an overall idea of the trends in a data set; it is an average of any subset of numbers. The moving average is extremely useful for forecasting long-term trends.

The simple moving average (SMA) was prevalent before the emergence of computers because it is easy to calculate.

A moving average is calculated from the average closing prices for a specified period.

For a simple moving average, the formula is the sum of the data points over a given period divided by the number of periods.

A five-period moving average, based on the prices above, would be calculated using the following formula:

weighed moving average

A Weighted Moving Average puts more weight on recent data and less on past data. This is done by multiplying each bar's price by a weighting factor. Because of its unique calculation, WMA will follow prices more closely than a corresponding Simple Moving Average

Weighted moving averages assign a heavier weighting to more current data points since they are more relevant than data points in the distant past. The sum of the weighting should add up to 1 (or 100 percent).

The weighted average is calculated by multiplying the given price by its associated weighting and totalling the values. The formula for the WMA is as follows:


Related Solutions

research and prepare a report on simple regression analysis, moving average, and weighted-moving average
research and prepare a report on simple regression analysis, moving average, and weighted-moving average
Continuing with the scenario from your product overview, report your findings and recommendations to the stakeholders...
Continuing with the scenario from your product overview, report your findings and recommendations to the stakeholders of your company.  Your job is to help the company launch a new pet food line. The food line will be for both cats and dogs, and the company is excited because the product is made of all natural ingredients. You will need to make some key strategic recommendations about how to launch and promote this new product line. Create a presentation to share...
Research the neutrino using the Internet and report your findings. In a nuclear decay, the nucleus...
Research the neutrino using the Internet and report your findings. In a nuclear decay, the nucleus of an atom splits apart. Larger particles can be detected and their masses and velocities can be recorded. Explain how the existence and properties of the neutrino could be predicted using the conservation laws.
What are the associated pro's and con's with healthcare services advertising and report your findings in...
What are the associated pro's and con's with healthcare services advertising and report your findings in depth. Then, communicate where you stand on the issue and justify your position and why.
You are to research, analyze, & write a report/essay of your findings on which Social media...
You are to research, analyze, & write a report/essay of your findings on which Social media channels impact business communication in an African nation or a Hispanic nation. In business, social media communications has become the norm rather than the choice. Social Media communications have stormed the business communicative world with its apparent new channels, terminologies, characters, and formats of communication; unbeknownst to mankind before now. As a result, we are pushed and pulled by multiple, sometime interrelated forces to...
findings to report to the charge nurse with a personality order?
findings to report to the charge nurse with a personality order?
what is a moving average?
what is a moving average?
(a) Develop a three-year moving average. (b) Develop a four-year moving average.
Question 1 Sales for the Forever Young Cosmetics Company (in $ millions) are as follows: Year Sales ($ millions) Year Sales ($ Millions) Year Sales ($ Milions 1996 2.4 2003 4.4 2010 4.5 1997 2.7 2004 4.8 2011 4.8 1998 3.3 2005 5.1 2012 5.1 1999 4.6 2006 5.3 2013 5.5 2000 3.2 2007 5.2 2014 5.7 2001 3.9 2008 4.6 2002 4 2009 4.5 (a) Develop a three-year moving average. (b) Develop a four-year moving average. (c) Develop a...
Two diseases that are associated with specific HLA types. Report your findings below; each description should...
Two diseases that are associated with specific HLA types. Report your findings below; each description should include which HLA antigen is associated and the specific effect on the patient?
Forecasting methods studied in this class are quantitative techniques including moving average, weighted moving average, exponential...
Forecasting methods studied in this class are quantitative techniques including moving average, weighted moving average, exponential smoothing, linear regression, and exponential smoothing with trend component. You are given a set of past demand data and asked to forecast demand for the future. What would you FIRST do to decide which demand forecasting method to use and why? Please choose one of the forecasting methods listed above.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT