WMA or Weighted moving average is one of the members of moving averages. You can easily work with this indicator at the Olymp Trade trading platform. Today, In this article I will be using the two sets of WMA to get the high-quality signals.
WMA or Weighted moving average is a technical indicator that helps the trader to identify the current trend direction. If you have ever used SMA or EMA these two indicators use the past records to get the data. However, the weighted moving average assigns greater weighting to the most recent price data and less weighting to the past data. The weighted moving average is considered more reliable and accurate than SMA or EMA to determine the trend.
Why Weighted moving average
- The weighted moving average is a technical indicator that uses the most recent price data in order to find the current trend.
- The calculation of WMA is quite complicated however, In Olymp trade, you don’t need to calculate as mathematics work is done by Olymp Trade software.
- The weighted moving average gives much more accurate data than the simple moving average or exponential moving average.
How to find and set WMA at Olymp Trade
Initially, The first thing you need to do is log in to your Olymp Trade account and open the indicator menu. next search for the Weighted moving average name and click twice on the same.
Lastly, click on the pencil icon and change the colour and the weighted moving average time frame to 5 & 26. Here, 5 is a fast line that acts quicker than line 25.
How to trade with the two combinations of Weighted moving average at Olymp Trade
WMA is an effective indicator and alone it is a really powerful indicator, However, if you combine them they generate even more high-quality signals. When these two lines intersect each other around the security it generates buy and sell signals.
When line 5 intersects the line 26 from the bottom and even after the few candles manages to stay above line 26 is a signal of a bullish trend and it’s the best time to place the buy trade.
Just like the above, When line 5 intersects the line 26 from the top and later manages to stay below line 5 it signals a bearish trend and here we can place a sell trade.
So, Trading with WMA is so easy. you just need to understand the basic concept and intersection points of the indicator. I will highly suggest you to try this strategy at the Olymp Trade demo account and once you are confident enough you can shift to Olymp Trade real account.
I wish you a very best of luck!!