WMA 13 21 34 Stack (Trend)
Buys when the 13/21/34 weighted moving averages stack bullishly — fast above mid above slow — and sells when the fast average drops back below the mid.
How It Works
- Compute three weighted moving averages with Fibonacci periods 13, 21 and 34.
- Buy when they stack bullishly — fast above mid above slow — meaning the short, medium and long views all agree the trend is up.
- Sell when the fast average drops back below the mid: the youngest part of the trend has cracked.
Worked example. The averages read WMA13 = 103.2, WMA21 = 102.5, WMA34 = 101.8 — freshly stacked in order after the fast one overtook the mid — so buy. The exit comes when WMA13 later slips back under WMA21.
The Math Behind The Indicators
Everything runs on closing prices of the traded timeframe: P is a close, Pt today's close, and N counts bars — one bar is one candle of that timeframe, so 20 bars on a 1h chart is 20 hours.
- Weighted Moving Average (WMA)
- A moving average where newer prices count more: the latest close gets weight N, the one before N − 1, down to weight 1 for the oldest. That makes it react to a turn in price sooner than a plain average.
- \[\mathrm{WMA}_N = \dfrac{N \cdot P_t + (N-1) \cdot P_{t-1} + \cdots + 1 \cdot P_{t-N+1}}{N + (N-1) + \cdots + 1}\]
- Example: With N = 3 and closes 100, 102, 104 (oldest to newest): (1·100 + 2·102 + 3·104) / (1 + 2 + 3) = 616 / 6 ≈ 102.67 — pulled closer to the latest price than the plain average of 102.