The SMA weights every price in the period equally, while the WMA assigns higher weights to recent prices using a linear scale, making it more responsive.
WMA places more emphasis on recent prices, assigning greater weight to the latest data points.
In a 10-period WMA, the most recent price might carry a weight of 10, the previous day 9, and so on, with the oldest price weighted at 1.
This structure allows WMA to react more quickly to recent price changes.
SMA gives equal weight to all data points, creating a smoother trend line that often lags behind market movements.
WMA signals trend changes faster, while SMA suits long-term trend confirmation.