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Weighted Moving Average

The Weighted Moving Average is a variation of the moving average in which each of the periods being considered is given a different weight. The more recent periods are given more weight. For example a three period moving average could be:

The forecast for period 'n' is 0.5 times the result for period 'n-1' plus 0.3 the result for 'n-2' plus 0.2 the result for the period before that. Note that the weights must sum to one.

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