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The moving average is computed from the demand for orders for the prior 3 months in the sequence according to the following formula: The 5-month moving average is computed from the prior 5 months of demand data as follows: The 3- and 5-month moving average forecasts applied quantitative methods trading all the months of demand data are shown in the following table.
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As always, traders should look at candlestick patterns and other indicators to see what is really going on in the methodw at the time.
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