DEFINITION of 'Linearly Weighted Moving Average'
A type of moving average that assigns a higher weighting to recent price data than does the common simple moving average. This average is calculated by taking each of the closing prices over a given time period and multiplying them by its certain position in the data series. Once the position of the time periods have been accounted for they are summed together and divided by the sum of the number of time periods.
BREAKING DOWN 'Linearly Weighted Moving Average'
For example, in a 15day linearlyweighted moving average, today's closing price is multiplied by 15, yesterday's by 14, and so on until day 1 in the period's range is reached. These results are then added together and divided by the sum of the multipliers (15 + 14 + 13 + ... + 3 + 2 + 1 = 120).
The linearly weighted moving average was one of the first responses to placing a greater importance on recent data. The popularity of this moving average has been diminished by the exponential moving average, but none the less it still proves to be very useful.

Simple Moving Average  SMA
A simple, or arithmetic, moving average that is calculated by ... 
Exponential Moving Average  EMA
A type of moving average that is similar to a simple moving average, ... 
Closing Price
The final price at which a security is traded on a given trading ... 
Weighted Average
An average in which each quantity to be averaged is assigned ... 
Weighted
A mathematical process by which figures and/or components are ... 
Golden Cross
A crossover involving a security's shortterm moving average ...

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