Consider tne following time series data. Year Value 1 234 287 3 255 4 310 298 250 7 302 267 240 10 336
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Moving average - The moving average (MA) is a simple technical analysis tool that smooths out price data by creating a constantly updated average price. The average is taken over a specific period of time, like 10 days, 20 minutes, 30 weeks or any time period the trader chooses. It is an arithmetic moving average calculated by adding recent prices and then dividing that figure by the number of time periods in the calculation average. A moving average is commonly used with time series data to smooth out short-term fluctuations and highlight longer-term trends or cycles. The threshold between short-term and long-term depends on the application, and the parameters of the moving average will be set accordingly.
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