Weighted Moving Average (WMA): Giving Recent Prices More Weight

Between the equal-weight SMA and the exponential EMA sits a third option: the linearly weighted moving average.

The Weighted Moving Average (WMA) assigns a linearly decreasing weight to each price, so the most recent close matters most and the oldest matters least. It reacts faster than the SMA but in a more predictable, linear way than the EMA.

The WMA formula

Each period gets a weight equal to its position in the sequence. For an N-period WMA, the most recent price gets weight N, the next N−1, and so on down to 1.

WMA = (P1×1 + P2×2 + ... + PN×N) / (1 + 2 + ... + N)

The denominator is the sum of the first N integers:

Sum = N × (N + 1) / 2

Worked example — a 5-period WMA with closes $20, $21, $19, $22, $23 (oldest to newest):

Numerator = 20×1 + 21×2 + 19×3 + 22×4 + 23×5
         = 20 + 42 + 57 + 88 + 115 = 322
Denominator = 5 × 6 / 2 = 15
WMA = 322 / 15 ≈ $21.47

Compare that with the plain SMA of $21 — the WMA is pulled higher because the largest recent close ($23) carries the most weight.

WMA vs SMA vs EMA

Feature	SMA	WMA	EMA
Weighting	Equal	Linear decrease	Exponential decay
Responsiveness	Slowest	Middle	Fastest
Smoothness	Smoothest	Middle	Least smooth
Calculation	Simple	Moderate	Recursive

When the WMA shines

1. Custom weighting needs — some platforms only expose the WMA, not the EMA
2. Hybrid traders — those who want faster reaction than SMA without the EMA's recursive compounding
3. Hull Moving Average — the popular Hull MA is built from two WMAs; it's smoother and lags less than either the SMA or EMA alone

Popular WMA settings

• 10 WMA — short-term momentum
• 20 WMA — swing-trading dynamic support
• 50 WMA — medium-term trend filter

How to read it

• Price above a rising WMA — bullish bias
• Price below a falling WMA — bearish bias
• Crossovers — a fast WMA crossing a slow WMA is a classic signal, but confirm with trend strength before acting

Common mistakes

• Confusing WMA with EMA — both weight recent prices, but the WMA's weights are linear and stop after N periods, while the EMA's decay continues forever
• Over-trading crossovers in a flat market
• Ignoring the slope — a flat WMA means no trend

How to start

1. Add a 20 WMA alongside a 50 SMA for a balanced view
2. Use the WMA for entries, the SMA for trend context
3. Pair every signal with a pre-set stop using the stop loss calculator
4. Size positions before entry with the position size calculator

Summary

The WMA is the middle child of moving averages — more responsive than the SMA, more linear than the EMA. It's a solid choice on platforms where you want recent-price emphasis without exponential weighting, and it's the building block of the popular Hull Moving Average.