Moving average
A moving average is the average of the last few days (or months), recalculated at every point, to smooth a series and show its trend.
Select any words here to ask your Maestro about them.
Daily orders rise at the end of every week, so the bars jump around. You try a 10-day moving average instead of a 7-day one, since it's longer. The 10-day line comes out:
How it's worked out: for each day, take the mean of that day and the days just before it. The window is how many days go into each average. It works on any time series: daily, weekly or monthly.
What it's for: seeing the trend on a line chart without each day's noise. Dashboards use it for cases, sales and visits.
What it costs: an average that only looks back is late to changes, and a weighted one (which counts recent days more) is quicker but jumpier.
How it's used
In Excel
Sales per month in column B
- In C4, type =AVERAGE(B2:B4)
- marked: Drag it down: C5 averages B3:B5, C6 averages B4:B6The window slides down one row at a time.
- Leave C2:C3 empty: there aren't 3 months to average yet
When to look closer
A week after the Fourth
7-day average
- On the Fourth of July, sales were half a normal day
- marked: Seven days later, the 7-day average jumps about 8%
Seven days after the holiday, the 7-day average jumps about 8% overnight. Did sales grow that day?
Ask your Maestro about Moving average
It answers from the free course page closest to this word, the way it answers while you study.
You: What does "Moving average" mean, in plain words?
Your Maestro: I'll explain it with a case of yours: it sticks better than a definition. Which number on your dashboard jumps around so much you can't see the trend?
Asking about: Answers from the page "How do I calculate a 3-month moving average in SQL?"
Only this browser keeps what you ask here. How it works
Learn more
Related terms
- Time series
A time series is a list of measurements of the same thing taken in order, every day, month or year, like daily sales or monthly inflation.
- Line chart
A line chart joins points in order, almost always over time, to show how a number changes: whether it rises, falls or repeats every season.
- Mean (average)
To find the mean (the average), add up all the values and divide by how many there are: 15, 7, 8, 13 and 7 add up to 50, and 50 ÷ 5 = 10.
- Weighted average
A weighted average gives each value a weight for how much it counts, instead of treating them all the same: multiply each value by its weight, add them up and divide by the sum of the weights.