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Home » Weighted Moving Averages on Binomo: A Comprehensive Overview

Weighted Moving Averages on Binomo: A Comprehensive Overview

WMA or Weighted Moving Average is one of the most widely used trend indicators. This indicator was introduced to solve the problems caused by other moving averages like SMA ( Simple Moving Average ) and EMA (Exponential Moving Average). The Weighted Moving Average weighs more on the most recent price data. you can find and use this indicator in the trend section of the Binomo indicator list.

How to configure Weighted Moving Average on Binomo?

 

 

To configure a Weighted Moving Average (WMA) on Binomo, follow these steps:

Firstly, Log in to your Binomo account. In case you don’t have one click here. or sign up using the form below.

 

Next, Click on the “Indicators” button and search for the Moving Averages tab. select the “Moving Averages” tab.

Choose the moving average type as the weighted from the drop-down menu.

 

You can also adjust the colour, width, and style of the WMA line according to your preferences. next, click “Apply” once you are done.

 

What is the Weighted Moving Average?

 

The WMA or Weighted Moving Average is one of the family members of moving averages. which weighs more on the most recent price data. suppose, you want to calculate the WMA ( Weighted Moving Average ) for the last 4 days.

The sum of days is: 1 + 2 + 3 + 4 = 10

The weight for the four quarters is:

 

Quarter        Fraction         Weight

 

 Current               1/10                    0.1

 Current               2/10                   0.2

 Current               3/10                   0.3

 Current               4/10                   0.4

 

Here, 4 is today’s price and you can calculate the weighted values by multiplying today’s price with 4 / 10 and yesterday’s 3 / 10, and so on.

 

How to Trade with Weighted Moving Average in Binomo?

There are multiple ways of using Weighted Moving Average in Binomo. like you can use three WMA lines or you can use a single WMA or double WMA lines for trend identification. In the Single moving average, line, you need to focus on the intersection of price and moving average line meanwhile, In the double and triple moving average line you need to focus on the intersection of the two or three lines.

 

Single WMA (Weighted Moving Average)

 

 As said above, In a single WMA or Weighted Moving Average, you need to focus on the intersection of the price and the indicator line. 

To, set single WMA on the chart. click on the indicator button and select moving average from the menu and select the type to WMA and change the period to 21.

 

 

 When the price intersects the indicator line from the bottom and later it stays above the line in an uptrend, here you can place a buy trade as it signals an upcoming bullish trend.

 

 

Vice versa,  when the price intersects the indicator line from the top and later it stays below the line in a downtrend. here, you need to place a sell trade as it signals an upcoming bearish trend.

 

 

Double WMA (Weighted Moving Average)

 

Trading with the combination of two WMAs is also very easy. while trading with two Weighted Moving Average you need to focus on the intersection of two lines.

 

To set two Weighted Moving Average

Firstly, click on the indicator button twice and select moving average type to weighted. next, change the period to 7 and 21.

 

 

When the 7- period moving average line intersects the 21-period weighted moving average line from the bottom and later stay above the same, here consider placing a buy trade as it signals the upcoming bullish trend.

 

Similarly, when the 7- period moving average line intersects the 21-period weighted moving average line from the top and later stays below the same, here consider placing a sell trade as it signals the upcoming bearish trend.

Try the above Trading Strategy for free on Binomo.

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