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 Linear Weighted Moving Average (LWMA).

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Join date : 2011-04-13

PostSubject: Linear Weighted Moving Average (LWMA).   Fri Aug 05, 2011 10:00 pm



The Linear WMA is more responsive to the latest currency price trends because it places more value on current prices and these values are introduced in progression, e.g. 1, 2, 3, etc. That it is measure linearly, means that the oldest value receives a weight of 1, the next value receives a weight of 2, the next value receives a weight of 3 and so on, till the last value which receives a weight equal to the period. This indicator is used to address the problem of the equal weighting. Unlike simple average, where the weight of all previous bars is equal, the linear weighted average makes the most recent bar more important. The weight of each older price bar decreases the linearly. Current prices receive more emphasis at the expense of older prices.
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Linear Weighted Moving Average (LWMA).
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