Wilder's Smoothing

Overview

Wilder's Smoothing, introduced by J. Welles Wilder Jr. in his 1978 book "New Concepts in Technical Trading Systems," is a unique type of exponential moving average that uses a different smoothing factor than traditional EMAs. The indicator applies a smoothing factor of 1/n (where n is the period), making it equivalent to a (2n-1) period EMA. This characteristic results in a smoother line that responds more gradually to price changes while still maintaining the ability to identify trends.

The recursive nature of Wilder's Smoothing means each value depends on the previous one, creating a continuous calculation that weights historical data more heavily than standard moving averages. This approach reduces market noise effectively while providing a reliable baseline for trend analysis. Wilder designed this smoothing method specifically to work with his other indicators, making it an integral part of many popular technical analysis tools.

Interpretation & Trading Signals

Example Usage

Code examples will be available once the Rust implementation is complete.