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Microsoft Tabular Modeling Cookbook by Paul te Braak

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Moving averages and last n averages

Moving averages are often used in analysis for two purposes.

Firstly, they are used to remove volatility from single point values. By including a number of prior observations, a smoother estimation of the volatile point is defined.

Secondly, they remove volatility and can provide the general (and expected) trend movement (just as any consecutive set of numbers are an indicator of trend). Since a daily value may include prior N periods, the value of N is often used to support long-term or short-term trends. For example, a trend based on 30 days may be considered a long-term trend, whereas a trend based on five days may be used to provide a short-term trend. This type of smoothing, and a mix of long- and short-term ...

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