WMA — Weighted Moving Average

Overview

The Weighted Moving Average assigns linearly increasing weight to more recent prices, making it more responsive than the SMA while maintaining a straightforward calculation. WMA is popular among forex traders who need faster trend signals without the complexity of exponential smoothing. Compare it with the EMA and other moving averages in our indicator guide library to choose the best fit for your strategy.

How It Works

WMA multiplies each closing price by a weight that increases linearly — the most recent close gets the highest weight. For a 10-period WMA, the latest close is multiplied by 10, the previous by 9, and so on, then divided by the sum of the weights (55). This produces a smoother curve than SMA with less lag.

Key Signals

• Price crossing above the WMA signals a potential uptrend.
• Price crossing below the WMA signals a potential downtrend.
• Short-period WMA crossing above a long-period WMA = bullish crossover.
• WMA slope direction reflects the current trend momentum.

Common Mistakes

• Assuming WMA is always better than SMA — in choppy markets the extra sensitivity creates more whipsaws.
• Using the same period WMA across all timeframes without adjustment.
• Not comparing WMA signals with EMA to understand which suits your asset better.