What Is Wilder's Smoothing (WEMA)?
WEMA is Wilder's exponential smoothing method used as the foundation for RSI, ATR, and ADX calculations.
Quick Answer
WEMA is Wilder's exponential smoothing method used as the foundation for RSI, ATR, and ADX calculations.
What Does WEMA Measure?
Wilder's Smoothing (WEMA) uses a modified exponential moving average with alpha = 1/period rather than the standard 2/(period+1). This gives a smoother, slower-reacting line than a standard EMA of the same length. Many of Wilder's classic indicators — RSI, ATR, and ADX — use this smoothing internally. Plotting WEMA directly on a chart provides a trend line that behaves consistently with those indicators. VaultCharts includes WEMA as a free overlay on desktop charts.
WEMA = Previous WEMA + (1/period) × (Price - Previous WEMA)How to Read WEMA
- 1Price above WEMA suggests bullish trend bias
- 2Price below WEMA suggests bearish trend bias
- 3WEMA reacts more slowly than standard EMA of the same period
- 4WEMA slope indicates trend strength and direction
How to Use WEMA in Trading
WEMA Settings
| Setting | Default | Description |
|---|---|---|
| Period | 14 | Number of periods for Wilder's smoothing |
| Source | close | Price source (open, high, low, close) |
Common Mistakes to Avoid
Use WEMA in VaultCharts
VaultCharts includes Wilder's Smoothing with customizable settings. Combine it with our automated pattern detection and trade signals for better analysis.