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Talking about the indicator, WMA or Weighted moving average is one of the family members of moving average. This is one of the most accurate moving averages that you can use. as this indicator place more emphasis on recent price changes than the older one. The calculation of the Weighted moving average is much more complicated than other moving averages. The formula for WMA is.
WMA = ( Price * n + Price (1) * n – 1 + .. Price ( n- 1 ) * 1) / (n * (n+1) / 2 )
Where n = Time period
Configure and set WMA at Olymp Trade
After logging in to your Olymp Trade account search for WMA on the Olymp Trade indicator list. just click on the indicator button at the bottom of the page. next, click twice on the indicator and set the indicator timer to 6 and 32. Here, 6 is the fast line and 32 is the slow line.
Also, make sure to change the colours of the two lines. Click the pencil icon on the top of the page.
Place buy trade with the bullish crossover
When the green line intersects the red line later the green line stays above the red line. It is the signal of a bullish trend.
Given above is a 30 minute chart and we can clearly see the green and red lines make the intersection and afterwards the green line is above the red for a long period of time. So, here we can open a buy trade.
Place sell trade with the bearish crossover
Just opposite to the above, when the red line intersects the green line and afterwards the red line is above the green line. It is a signal of a bearish trend. Just like above, when the two lines intersect each other and later the red line is above the green line, we can place a sell trade.
I personally use WMA a lot and I can say via my experience this indicator does give a very high-quality trading signal. You can also combine the weighted moving average with other trend indicators to get better results. The best thing you can do is try the indicators combination on the Olymp Trade demo account. If you are facing any issues or have any doubt do comment below or contact me I will surely try to help you as soon as possible.