Thanks again for the thorough response Dr Magdon. I think we are talking along the same lines just a bit is lost in translation - one of the disadvantages of written communication. I apologies for my wording though, I don't mean to confuse; I used the words "Recency weighted regression" without knowing that this generally means something else in the machine learning literature.

I also think I now understand more clearly the application of

so thanks again for explaining. I think I need to read up on this more as this makes me question: "how do I measure how well this recency weighting would have performed in the past?". I assume to answer this you would need to loop through the above formula starting from an arbitrary start date i.e., starting with a dataset equal to the rule of thumb: 10 x DegreesOfFreedom e.g., in context of the simplest model (

) we would start with a dataset of the first 50 days... pseudocode:

for i=50 to 996 step 1

.......

= wholeDataSet[items 1 to i]

.......do the regression on

and find

by minimising

.......error = error +

endfor