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To: NasdaqMaster who wrote (9)10/2/2001 7:15:20 PM
From: John Busby  Respond to of 24
 
Simple vs Exponential Moving Averages

A simple moving average is the conventional calculation of this indicator. It is calculated by adding the prices over a given number of periods, then dividing the sum by the number of periods.

As an example, say you were looking at a 3-day moving average, and the last 3 closing prices were 100, 103, 109. The simple moving average would be (100 + 103 + 109)/3 = 104

An exponential moving average weights the recent periods more than past periods. The equation for this is

Exponential Percentage = 2/Time Period + 1

More information is available in IQ Chart's education section at
iqchart.com

Thanks,
John