Exponentially Weighted Averages

Implementation of Exponentially Weighted Averages and it difference in Pine Script. It can generate a line that adjust to the overall trend of a graphic.

Exponentially Weighted Averages

This technique is used for generating smoother lines that adjust to a graphic. In finances, it is used to predict the overall trend of a graphic. The function that defines the EWA is the one bellow:

• Vt = β V(t-1) + (1 - β) θt
  

Where:

• β: Hyperparammeter that we have to adjust.
  
• V(t-1): Value calculated for the previous element of the graphic.
  
• θt: Current element of the graphic.