Moving average calculation

[Chandrasekaran_Manickam_7MBo3 (Chandrasekaran Manickam)]

Course Name: Swing Trading Strategies, Section No: 8, Unit No: 1, Unit type: Document



Page-1

i-th average is calculated based on y_i, y_i-1, y_i-2, y_i-3, y_i-4  for 5 period average. It's given in + sign which is not suiting the logic.



In Page-2

For calculating n-moving average the i-th average starts from i-th index and its moving average is y_i, y_i-1, y_i-2, y_i-3, y_i-4, … y_i-n-1  Whereas in document its mentioned as n-th position average calculation.



Hope this stands clear and correct.



 

[Satyapriya_Chaudhari_63X1f (Satyapriya Chaudhari)]

Hi Chandrasekaran,



Let's suppose you want to calculate the 5-period moving average. The average calculated based on y_i, y_i-1, y_i-2, y_i-3, y_i-4 will not be the i^th average. But it will be the (i-4)^th average in the series. In this case, the first average will correspond to y₅ and not y₁. Similarly, i^th average will correspond to y_i+4 and will be the average of y_i, y_i+1, y_i+2, y_i+3, y_i+4



Alternatively, you can say that average calculated based on y_i, y_i-1, y_i-2, y_i-3, y_i-4 will correspond to y_i. 



The same holds for the n-period moving average. Please note that the i^th average is not same as the average corresponding to y_i.



We have noted down your feedback. I hope this has provided some clarification. 



Thanks,

Satyapriya

[Chandrasekaran_Manickam_7MBo3 (Chandrasekaran Manickam)]

Hi Satyapriya,

Thanks for your prompt response.

i-th is the position for which we calculate average. We take past values which is previous values for getting average. Previous position is lesser than current 'i'. Hence the index position will be subtracted till reaching n-1 level from i.

i+1 will be the future value which we don't get when we calculate for i-th average.

Please take it as healthy discussion, not otherwise.



The statement from you gives ambiguity. The alternatively statement which I mentioned as correct and you too agreed here.

The average calculated based on yi, yi-1, yi-2, yi-3, yi-4 will not be the ith average. But it will be the (i-4)th average in the series.

Alternatively, you can say that average calculated based on yi, yi-1, yi-2, yi-3, yi-4 will correspond to yi. 









 

[Satyapriya_Chaudhari_63X1f (Satyapriya Chaudhari)]

Hey Chandrasekaran,



We really appreciate you sharing your observations. Thanks for pointing the ambiguity. We will update the document for more clarity.



Thanks again,

Satyapriya

[Chandrasekaran_Manickam_7MBo3 (Chandrasekaran Manickam)]

Thank you very much Satyapriya.