
Weighted Moving Average is calculated by multiplying the
first datapoint by 1, the second by 2, the third by 3, etc.
The final result is then divided by the sum of the weights.
More recent data is thus moreheavily weighted, and
contributes more to thefinal WMA value.
The rule for interpreting WMA is slightly different than that
for SMA, because it is a more sensitive indicator. When
WMA changes direction this is a warning of a change in
trend.
