moving average

[tinybears]

Hey,

I'm calculating a moving average, and I found this formula. In cel R14
this formula is set:
In cel R$1 there is the number 12,what are the days I want to calculate
the average. Cel G14 is the current closeprice of the stock. Can
someone explains this?

thx

=(R13+1/(R$1+1)*(G14-R13)

 

[kcc]

Assuming R13 is the previous moving average, then this is an exponential
moving average.
As an example if R1=4, then G14 get a weight of .2 and the previous average
weight is .8.
Applying the same rule to R13 mean G13 get a weight of .8 * .2, G12 get
..8*.8*.2, etc.
The formula I have seen would use 2/(R1+1) which mean if you put in 4 you
get
the equivalent of 9 in the standard formula.
kcc

 

[tinybears]

Thx for the explanation !