GlossaryWMA 50

WMA 50

The WMA 50 is a weighted average of the chart's last 50 closing prices, in which the weight rises linearly toward the most recent candle. It shows the medium-term trend and reacts faster than an SMA 50.

Calculation

WMAt=∑j=049(50−j) Ct−j1275\mathrm{WMA}_t = \frac{\sum_{j=0}^{49} (50-j)\,C_{t-j}}{1275}

CtC_t is the closing price of candle tt. The most recent candle gets a weight of 50, the previous one 49 and so on, and the oldest gets 1. It is divided by the sum of the weights, 50⋅51/2=127550 \cdot 51 / 2 = 1275. The most recent candle therefore weighs about 3.9%, the oldest under 0.1%. The line only starts at the 50th candle. It is calculated on the chart's candles, and the current candle counts with its current price.

What it is used for

  • As a medium-term trend filter that shows turns earlier than the SMA 50. The center of gravity of the weights lies a little over 16 candles back for the WMA 50, compared with 24.5 candles for the SMA 50 and EMA 50.
  • Together with the WMA 20 as a pair: when the WMA 20 crosses the WMA 50, momentum turns, earlier than with SMAs of the same lengths and with correspondingly more false signals in sideways phases.

Unlike with the EMA, a candle drops out of the average entirely after 50 candles.

Settings

SettingDefaultEffect
Length501–500 candles. The menu name stays the same; the line label shows the new length.

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