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# Weighted Moving Average (WMA)

### Description

WMA stands for weighted moving average. It helps to smooth the price curve for better trend identification. It places even greater importance on recent data than the EMA does.

### Formula

The weighted moving average is calculated by multiplying each datum in your series by a different ratio and then taking the sum of those products. Because of the complexity of calculating this moving average, an example follows.

5 day WMA.

Assume the closing prices over the last 5 days are:

 Day 1 2 3 4 5 (current) Price 77 79 79 81 83

The formula for the ratio that is applied to each of the prices is:

 <= n, the numerator in each case is the numeral of the day number in the series. <= d, the denominator is the sum of the number of days as a triangular number. Since there are 5 days, the triangular numbers are 5, 4, 3, 2, and 1. The sum is 5+4+3+2+1=15.

Therefore the 5 Day WMA is 83(5/15) + 81(4/15) + 79(3/15) + 79(2/15) + 77(1/15) = 80.7

 Day 1 2 3 4 5 (current) Price 77 79 79 81 83 WMA 80.7