Weighted Moving Average (WMA)

WMA assigns linearly increasing weights to more recent data points. The most recent price gets weight n, the previous gets weight n-1, down to the oldest getting weight 1. The formula is: WMA = (n×P1 + (n-1)×P2 + ... + 1×Pn) / (n + (n-1) + ... + 1). This linear weighting makes WMA more responsive than SMA but smoother than EMA. With default 30-period, the latest price has 30× more influence than the oldest. WMA balances responsiveness and smoothness between SMA and EMA.

Cryptocurrency traders use WMA when they want more emphasis on recent prices than SMA provides, but prefer linear weighting over EMA's exponential weighting. WMA crossovers generate trading signals earlier than SMA but with less whipsaw than EMA. When price crosses WMA, it signals trend changes with moderate confirmation. WMA is particularly useful for traders who understand and prefer linear weighting mathematics. Combined with other MAs (SMA, EMA) for crossover systems, or used as dynamic support/resistance. Popular among traders seeking a middle ground between SMA stability and EMA responsiveness.