Exponential smoothing is a weighted average of the prior observation with the prior forecast. The weight α determines the proportion of the weight given to the prior observation. As the weight increases, the forecast becomes more determined by the prior observation and less by the prior forecast. In the graph, the red dots with solid lines represent the time series data and the blue dots with dotted lines represent the exponential smoothing forecast. Use the slider below the graph to change the value of α between 0 and 1.