<p><strong>Weighted Moving Average (WMA)</strong> is a technical analysis indicator that assigns greater weight to more recent price data, making it more responsive to recent price changes compared to Simple Moving Average (<a href="/NewSite/encyclopedia/sma/" class="ency-link">SMA</a>) or Exponential Moving Average (<a href="/NewSite/encyclopedia/ema/" class="ency-link">EMA</a>).</p>
<p>WMA matters as it helps traders identify trends and make better-informed trading decisions by giving more importance to recent price action. For instance, a WMA with a 14-period weight of 0.9 will give more significance to the most recent period, making it highly sensitive to price changes.</p>