Definitions
In plain terms
With smoothing constant alpha, a prior observation's recursive influence contains powers of one minus alpha.
Technical
The exact finite-sample weights depend on initialization, normalization, missing observations, and whether adjusted weighting is used.
Scope
Geometric decay is not the same as a finite linear WMA schedule.
Formula
Relative age-k weight is proportional to alpha * (1 - alpha)^kw_k\propto\alpha(1-\alpha)^k| Symbol | Meaning | Unit |
|---|---|---|
alpha | smoothing constant | ratio |
k | observation age | periods |
Output unit: relative weight
Examples
- A governed lesson uses Geometric Weight Decay only with declared inputs, timing, parameters, and edge-case behavior.
Common misconceptions
- Geometric decay is not the same as a finite linear WMA schedule.
Concept relationships
Prerequisites
Required by
Where this concept is used
Evidence and governance
- Moving Average and Smoothing Methods NIST/SEMATECH · official standard
Supports: preferred label, short definition, technical definition, formula
Limits: Forecasting notation and initialization can differ from technical-indicator conventions and must be translated explicitly.
- Reviewed by
- fintech-builder-batch-006
- Last reviewed
- 2026-07-27
- Next review
- 2027-07-27
- Record status
- evidence reviewed
This record is evidence-reviewed and readable, but not yet promoted to published — it is served noindex,follow and excluded from the sitemap.