What Is Weighted Moving Average (WMA)?
WMA calculates a moving average that assigns linearly increasing weight to more recent prices, making it more responsive than SMA.
Quick Answer
WMA calculates a moving average that assigns linearly increasing weight to more recent prices, making it more responsive than SMA.
What Does WMA Measure?
The Weighted Moving Average (WMA) is a trend-following overlay that gives progressively more weight to the most recent data points. Unlike a Simple Moving Average where every price has equal influence, a 20-period WMA treats the latest close as 20 times more important than the oldest bar in the window. This makes WMA sit between SMA and EMA in responsiveness — useful when you want smoother lines than EMA but faster reaction than SMA. VaultCharts includes WMA as a free overlay on desktop charts alongside SMA and EMA.
WMA = (P1×1 + P2×2 + ... + Pn×n) / (1 + 2 + ... + n), where P1 is oldest and Pn is most recentHow to Read WMA
- 1Price above WMA suggests bullish short-term trend
- 2Price below WMA suggests bearish short-term trend
- 3WMA crossovers with SMA or EMA can signal trend shifts
- 4Steeper WMA slope indicates stronger recent momentum
How to Use WMA in Trading
WMA Settings
| Setting | Default | Description |
|---|---|---|
| Period | 20 | Number of periods for WMA calculation |
| Source | close | Price source (open, high, low, close) |
Common Mistakes to Avoid
Use WMA in VaultCharts
VaultCharts includes Weighted Moving Average with customizable settings. Combine it with our automated pattern detection and trade signals for better analysis.