This method is intended to overcome flaws in previous high school that uses the same weighting on each day. Calculation using the formula in the formula WMA linearly weighted moving average that gives more weighting to the last day, so it is considered more representative in terms of predicting the price at a later date.
To make it easier to understand, the illustrations are as follows: if you want to buy a car we would find out the final price of the car. Prices last month would be more important than the price a year ago. And the price of one day earlier would be even more important than the price a month ago. But we will not further discuss about the WMA, since WMA is considered more responsive although it has another weakness, which only covers a certain time period only. For example use WMA (30), then the price is included only covers 30 days closing price. This issue will attempt to overcome at EMA (Exponential Moving Average).
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