to select a value for alpha when using exponential smoothing

to select a value for alpha when using exponential smoothing

Solution

refer to this video:

https://www.youtube.com/watch?v=zOGfG65ASdA

Alpha can take any value between 0 and 1:

The speed at which the older responses are dampened (smoothed) is a function of the value of . When is close to 1, dampening is quick and when is close to 0, dampening is slow.

We choose the best value for so the value which results in the smallest MSE.

The above video shows a solved example for it.