A middle ground between the simple and exponential averages in speed and smoothness.
The short answer
- What is the Weighted Moving Average indicator (WMA)?
- Weighted Moving Average: linear declining weights, so the latest day counts most.
- When does WMA get it wrong?
- It shares the structural lag of all moving averages. See its current reading on the platform's symbols, at the latest daily close, in the “Reading now” table on this page. See it now →
Reading now
| Ticker | Value | Five sessions ago | Status |
|---|---|---|---|
| SPY | 772.63 | 767.91 | Price is 0.7% above the line |
| QQQ | 746.55 | 740.06 | Price is 0.4% below the line |
| IWM | 279.83 | 282.13 | Price is 1.1% below the line |
| DIA | 513.79 | 514.20 | Price is 0.5% above the line |
A description of where the number sits against its thresholds. It is not an entry or exit signal.
Indicator limit
It shares the structural lag of all moving averages.
Read it with
On-Balance Volume: trust the slope of the average when on-balance volume rises with it.
Answers: does the market have a trend?
What it actually does
The Weighted Moving Average spreads its weights in a linear decline: the latest day gets the largest weight, then the weight drops by a fixed amount for each older day until it reaches the smallest weight at the start of the window. It sits between the simple average, which treats all days equally, and the exponential average, whose weight falls by a percentage rather than a fixed amount.
The practical difference from its siblings
The simple average keeps a 20-day-old data point at full weight and then drops it all at once, which creates an artificial “exit jump.” The exponential average never drops anything but shrinks its weight forever. The weighted average drops data on a linear schedule, avoiding the exit jump without an infinite memory.
When to choose it
Use it when you want a faster response than the simple average without the exponential average's heavy sensitivity, and when the “exit jump” is a nuisance in data with one outlier candle. It is a middle option, not a hero: its differences from the other two are small on most assets and rarely change a decision.
Hypothetical example
A stock jumped 10% in one session 20 days ago. The simple 20-day average drops suddenly on the day that candle leaves the window, even though price did not move today. The weighted average had already trimmed its weight step by step, so it creates no artificial jump.
Where it errs and why
It shares the structural lag of all moving averages. It does not solve the core problem, it only eases a symptom. And because it is rarely used, fewer published conventions exist for its settings than for its siblings.
Read it with
Don't read it alone. First classify the environment with the trend strength indicator to learn whether trend tools or range tools fit. Then confirm with volume, which separates supported moves from empty ones. Then place it on the structural levels from the gamma map, since a signal at a dense wall carries more weight than one in an empty price zone. This three-step order cuts the worst signals before they cost you anything.
Where to see it on the platform
The technical chart in the members area draws it on any symbol and timeframe you choose, and the scanner terminal shows its reading in the symbol card with the rest of its family.
