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An N-day weighted moving average is an average of today’s close and preceding
closes, with weighting factor N for today, *N-1* for yesterday,
*N-2* for the day before, etc. The influence of past data thereby
decreases with its age, down to nothing beyond N days.

The formula is as follows, with p1 for today’s closing price, p2 yesterday’s, etc.

N * p1 + (N-1) * p2 + (N-2) * p3 + ... + 2 * p[N-1] + pN WMA = -------------------------------------------------------- N + N-1 + N-2 + ... + 2 + 1

Like the EMA (see Exponential Moving Average), the WMA gives a higher
weighting to recent prices than past prices, so it tracks those recent prices
more closely than a simple moving average (see Simple Moving Average).
The following graph shows how the weights decrease for *N=15*.

Copyright 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2014, 2015, 2016, 2017 Kevin Ryde

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