# Weighted Moving Average (WMA)

> The weighted moving average gives linearly more weight to recent prices. Learn the WMA formula, how it compares with SMA and EMA and the Hull moving average.

Source: https://learn.tradelabsai.com/indicators/weighted-moving-average/  
Track: Indicators · Level: Beginner · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Weighted Moving Average (WMA)", https://learn.tradelabsai.com/indicators/weighted-moving-average/

The weighted moving average (WMA), also called the linearly weighted moving average, assigns more importance to recent prices by giving each price a weight that rises in a straight line from oldest to newest. In a 5 period WMA, the newest price is multiplied by 5, the previous by 4 and so on down to 1. The result reacts faster than a simple moving average and, unlike the EMA, completely forgets prices older than its window.

## The formula

```
WMA = (n × Pₙ + (n−1) × Pₙ₋₁ + ... + 1 × P₁) ÷ (n + (n−1) + ... + 1)
```

The denominator is the sum of the weights, which equals n × (n + 1) ÷ 2.

**Example: A 5 period WMA**
Closes from oldest to newest: 20, 21, 22, 21, 24. Weights 1 to 5.
Weighted sum = 1×20 + 2×21 + 3×22 + 4×21 + 5×24 = 20 + 42 + 66 + 84 + 120 = 332.
Sum of weights = 15. WMA = 332 ÷ 15 ≈ 22.13.
The simple average of the same prices is 21.60. The WMA sits closer to the latest price because recent closes count more.

## Comparing WMA, SMA and EMA

| | SMA | WMA | EMA |
|---|---|---|---|
| Weighting | Equal | Linear, newest heaviest | Exponential, newest heaviest |
| Responsiveness | Slowest | Fast | Fast |
| Memory | Exactly n periods | Exactly n periods | Infinite, fading |
| Smoothness | Smoothest | Less smooth | Less smooth |

In practice, a WMA and an EMA of similar length look much alike on a chart. The WMA tends to hug price slightly more closely over short windows.

## When traders use the WMA

- **Short term trend tracking,** where faster reaction than an SMA is wanted.
- **As a component of other indicators.** The best known is the Hull moving average.

### The Hull moving average

Alan Hull designed an average to reduce lag while staying smooth. It combines WMAs:

```
HMA(n) = WMA( 2 × WMA(n/2) − WMA(n), √n )
```

The result follows price very closely with less noise than a short WMA. Many traders use it to spot trend changes early, accepting that faster signals still bring some false ones.

## Trading with the WMA

The uses are the same as other moving averages:

1. **Trend direction:** price above a rising WMA suggests an uptrend.
2. **Pullback entries:** reactions near the WMA in trending markets.
3. **Crossovers:** a fast WMA crossing a slow one, or price crossing the WMA.
4. **Filters:** only trade in the direction of a longer WMA's slope.

Because it reacts faster, the WMA suits shorter timeframes and faster strategies more than long term trend filtering, where the 50 and 200 day SMAs remain the standard references. See [Moving Averages Explained](https://learn.tradelabsai.com/indicators/moving-averages-explained/).

## Choosing between them

There is no universally better average. Choose based on purpose:

- **Long term trend and widely watched levels:** SMA.
- **Responsive trend tracking:** EMA or WMA.
- **Low lag with smoothing:** Hull moving average.
- **Volume emphasis:** VWMA. See [Volume-Weighted Moving Average (VWMA)](https://learn.tradelabsai.com/indicators/vwma/).

Test the same strategy with different averages; often the difference is smaller than expected, and the rules around entries, exits and risk matter more.

## Common mistakes

- **Switching averages constantly** to fit recent price action.
- **Expecting a faster average to remove lag entirely.** All moving averages lag.
- **Using fast averages in choppy markets,** which produces many false signals.

## Frequently asked questions

### What is a weighted moving average?

A moving average that multiplies each price by a weight that increases linearly for more recent periods, making it more responsive than a simple average.

### Is the WMA the same as the EMA?

No. Both weight recent prices more, but the WMA uses linear weights over a fixed window, while the EMA uses exponentially decaying weights and never fully drops old data.

### What is the Hull moving average?

A low lag moving average built from weighted moving averages, designed to follow price closely while remaining smooth.

Next, learn the volume weighted version: the [Volume-Weighted Moving Average (VWMA)](https://learn.tradelabsai.com/indicators/vwma/).

## Continue learning

- Next lesson: [Volume-Weighted Moving Average (VWMA)](https://learn.tradelabsai.com/indicators/vwma/)
- Previous lesson: [Exponential Moving Average (EMA)](https://learn.tradelabsai.com/indicators/exponential-moving-average/)
- Related: [Exponential Moving Average (EMA)](https://learn.tradelabsai.com/indicators/exponential-moving-average/): The EMA weights recent prices more heavily, so it reacts faster than an SMA. Learn the EMA formula, the smoothing factor, popular settings and how traders use it.
- Related: [Simple Moving Average (SMA)](https://learn.tradelabsai.com/indicators/simple-moving-average/): The simple moving average is the plain average of recent closes. Learn the SMA formula, how lag works, popular SMA settings and practical trading uses.
- Related: [Volume-Weighted Moving Average (VWMA)](https://learn.tradelabsai.com/indicators/vwma/): The VWMA weights each price by its volume, so heavily traded periods count more. Learn the formula, how it differs from SMA and VWAP and how to read the gap.
- Related: [Moving Averages Explained](https://learn.tradelabsai.com/indicators/moving-averages-explained/): Moving averages smooth price to show the trend. Learn SMA vs EMA, popular settings like the 20, 50 and 200 day, crossovers, dynamic support and common mistakes.