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Welles Wilder Smoothing
The Welles Wilder’s Smoothing indicator is similar to an exponential moving average. The indicator does not use the standard exponential moving average formula. Welles Wilder described 1/14 of current period’s data + 13/14 of previous period’s average as a 14-period exponential moving average
Usage
Moving averages are used to help identify the trend of prices. By creating an average of prices, that moves with the addition of new data, the price action on the security being analyzed is ‘smoothed’.
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