What is WMA
A weighted moving average (WMA) is a line on the chart that shows the average price over a chosen number of bars. It gives the newest bars more importance than the older ones.
A simple moving average treats every bar in the period equally. A WMA does not. It reacts faster to recent price changes and still smooths out some of the noise.
Ready to try it on a real or demo account?
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The formula: linear weights
The WMA uses linear weighting. The weights fall in a straight line from the newest bar to the oldest.
- The newest bar gets a weight equal to the period length (n).
- Each older bar gets a smaller weight, reduced by the same fixed step every time.
- The oldest bar in the window gets the smallest weight.
- Each closing price is multiplied by its weight. The results are added up and divided by the sum of all the weights.
The EMA works differently. It weights bars exponentially and never fully drops old data. The WMA ignores everything outside its window. Inside the window, the oldest bars still count for less.
Adding the WMA in MT4 and MT5
MetaTrader has no separate WMA indicator. You use the standard Moving Average and change its method.
- Open a chart in MetaTrader 4 or MetaTrader 5.
- Go to Insert → Indicators → Trend → Moving Average.
- Set MA method to Linear Weighted.
- Choose the period and Apply to (usually Close).
- Pick a colour and click OK.
You can practise on a demo account before you use the line on a live chart.
Reading the WMA: a drawn example
The sketch below is drawn by hand and shows no real prices. * is price and - is the WMA.
- Slope. A rising WMA means recent closes have been higher on average. A falling WMA means the opposite.
- Price above or below the line. This shows where price sits relative to its weighted recent average. It does not predict the next move.
- Bend after a turn. The WMA bends sooner than an SMA of the same length, but it still lags. Every moving average is a lagging indicator.
Typical uses
- Trend filter. Some traders check the WMA slope to describe the current trend direction (see market trends).
- Dynamic support or resistance. Price sometimes reacts near the line. See dynamic support.
- Crossovers. A fast and a slow WMA can be compared. The MA crossover page covers the limits of that approach.
- Building block. Other indicators, such as the Hull moving average, are built from WMAs.
Parameter choices for experienced traders
- Shorter period: tighter to price, more whipsaws.
- Longer period: smoother line, more lag.
- WMA vs EMA of the same length: they often look similar. The WMA drops old bars more abruptly, so it can jump when a large bar leaves the window.
- Applied price: Close is standard. Typical or weighted price reduces the effect of wick spikes.
- Timeframe: a WMA on a higher timeframe can be compared with a lower one through multiple timeframe analysis.
There is no correct period. Test settings on historical data and on a demo, and treat any result as specific to that sample.
Where the WMA misleads
- Sideways markets. Price crosses the line back and forth, and the slope flips often without a lasting trend.
- News spikes. A single large bar pulls the line sharply because recent bars carry the most weight.
- Gaps and thin sessions. Weekend gaps and low-liquidity hours distort the average.
- Live bar. On the current, unfinished bar the WMA value changes until the bar closes.
- Curve fitting. A period tuned to past data rarely behaves the same way later.
Leveraged forex and CFD trading can lose money fast. No moving average removes that risk. See risk management.
Frequent questions
What is WMA in trading?
It is a moving average that gives linearly larger weights to newer bars. This makes it more responsive than an SMA.
Is WMA better than EMA?
Neither is better in general. They weight data differently and suit different testing results and preferences.
What period should I use for the WMA indicator?
There is no standard answer. Shorter periods react faster and give more noise. Longer periods are smoother and lag more.
Does the WMA repaint?
It does not change the values of closed bars. The value on the current bar moves until that bar closes.
Can the WMA alone tell me when to trade?
No. It describes past prices. Combine it with other technical analysis and strict risk control.