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When a mobile station moves, the path loss and shadow fading contribute to the large-scale variation in the received signal strength. The variation of signal strength caused by shadow fadings is a random process, and handover decision mechanisms based on measurements of signal strength induce the "ping-pong effect." This paper proposes an improved handover algorithm, based on the estimates of location and velocity of the mobile station, to suppress the ping-pong effect in cellular systems. A practical approach based on GSM measurement data is used to estimate the location and velocity of mobile station to identify the correlation among shadowing components. The impact of location errors on handover performance was examined, and the proposed handover algorithm was applied to a real GSM system in urban Taipei city. The results indicate that the number of unnecessary handover can be reduced 18-26 percent by the proposed approach compared to the conventional method, while the signal outage probability remains similar. Besides, the computational complexity of the proposed algorithm is low, and the algorithm does not use a database or lookup table.