DEFINITION of 'Trimmed Mean'
A method of averaging that removes a small percentage of the largest and smallest values before calculating the mean. After removing the specified observations, the trimmed mean is found using an arithmetic averaging formula.
INVESTOPEDIA EXPLAINS 'Trimmed Mean'
The trimmed mean looks to reduce the effects of outliers on the calculated average. This method is best suited for data with large, erratic deviations or extremely skewed distributions. A trimmed mean is stated as a mean trimmed by X%, where X is the sum of the percentage of observations removed from both the upper and lower bounds.
For example, a figure skating competition produces the following scores: 6.0, 8.1, 8.3, 9.1, 9.9. A mean trimmed 40% would equal 8.5 ( (8.1+8.3+9.1)/3 ), which is larger than the arithmetic mean of 8.28. To trim the mean by 40%, we remove the lowest 20% and highest 20% of values, eliminating the scores of 6.0 and 9.1. As shown by this example, trimming the mean can reduce the effects of outlier bias in a sample.

Arithmetic Mean
A mathematical representation of the typical value of a series ... 
Harmonic Average
The mean of a set of positive variables. Calculated by dividing ... 
Mean
The simple mathematical average of a set of two or more numbers. ... 
Skewness
Describe asymmetry from the normal distribution in a set of statistical ... 
Standard Deviation
1. A measure of the dispersion of a set of data from its mean. ... 
Weighted Average
An average in which each quantity to be averaged is assigned ...

Retirement
Combining Your Plan Assets? Not So Fast!

Mutual Funds & ETFs
5 Ways To Measure Mutual Fund Risk

Personal Finance
Revive Your Portfolio

Options & Futures
Financial Concepts