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Weighted Moving Average (WMA)

Before reading this documentation please check the Simple Moving Average (SMA) documentation, this will make a lot more sense afterward.

The Weighted Moving Average is a type of moving average indicator that takes into account the average among previous candle price data. The average among the prices is used to plot a line that goes over the price action.

When the price action is above the WMA the market is deemed to be "bullish", while the price action is below the WMA the market is deemed to be "bearish".

The differentiating factor between Simple Moving Average and Exponential Moving Average is that the WMA adds more weight to the more recent candles at a static interval. So the more recent candles have more significance when used to calculate the average.

WMA Formula

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Images source: Investopedia

For more information (also the source) visit: Investopedia

How to Visualize Weighted Moving Average

1. Head over to TradingView and go to your desired pair.

2. Click on "Indicators" in the top bar.

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3. Select "Moving Average Weighted".

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4. Click on the cogwheel to change settings.

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5.  Now you can modify the Weighted Moving Average indicator and once you like the settings you can transfer them over to BravoBot.

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