WMA 20 50 200 Short Stack

1. Compute three weighted moving averages over 20, 50 and 200 bars — the same trio as the long stack, read from the other side.
2. Sell short when they stack bearishly — fast below mid below slow. The 200-bar anchor means the short is only taken once the downtrend is established on every horizon.
3. Buy back (cover) when the fast average climbs back above the mid.

Worked example. WMA20 = 95 drops under WMA50 = 95.8 while both already sit below WMA200 = 102 — the bearish stack aligns, so the strategy sells short at 95. Price slides to 84 before WMA20 turns back above WMA50, where the short is covered for roughly an 11% gain.

Everything runs on closing prices of the traded timeframe: P is a close, P_t 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.

WMA_N = (N · P_t + (N-1) · P_t-1 + … + 1 · P_t-N+1) / (N + (N-1) + … + 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.