Advanced Forex Trading Course for Professional Traders

An exponential moving average is calculated slightly differently than is a simple moving average inasmuch as it exponentially weights each value. The purpose of using an exponential moving average is, theoretically, to provide an average which will be more responsive, theoretically, to the underlying data.

There are numerous sources which you may consult for the specifics of exponential MA calculation. 3. Weighted Moving Average (WMA). This is one of my favorite moving averages, because it does not assign equal weight to all values in the data series. There are two types of weighted moving averages, frontweighted (also called front-loaded), and back-weighted (also called backloaded).

If we refer to the front portion of the data as the most recent data, then a front-weighted moving average multiplies each value toward the most recent data by a constant weight or value in order to provide for greater impact of current data. A back-weighted moving average weights the earliest data in the price series in order to give it more significance in the final analysis.

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