#Weighted moving average formula series

The weighted moving average (WMA) is a technical indicator that assigns a greater weighting to the most recent data points, and less weighting to data points in the distant past. Among those, two other moving averages are commonly used among financial market are:

#Weighted moving average formula series

The Simple Moving Average is only one of several moving averages available that can be applied to price series to build trading systems or investment decision frameworks. Simple Moving Average (SMA) makes use of the sliding window to take the average over a set number of time periods. It smoothens the data.ĪRIMA(Autoregressive Integrated Moving Average Model) algorithm uses moving averages to make time-series data predictions.Įxamples: Stock prices, weather reports, air quality, gross domestic product, employment, etc.

Moving average is mostly used with time-series data to capture the short-term fluctuations while focusing on longer trends.

It is also known as Rolling Mean or Moving Mean because it includes taking the average of the dataset. Moving Average is also known as Rolling or Running Average. Weight Moving Average or WMA is used extensively in trading setupsĪ Moving Average is used to analyze the time-series data by calculating averages of different subsets of the complete dataset. In this article, we’ll calculate the Weighted Moving Average in Python.