What does LWMA stand for in moving averages?

LWMA stands for Linearly Weighted Moving Average. This type of moving average gives more weight to recent price data compared to older data. The "linear" aspect refers to the way in which the weights are assigned; they increase linearly as the data gets more recent.

For instance, in a 5-period LWMA, the most recent price would be multiplied by 5, the next by 4, and so forth, down to the oldest price, which would be multiplied by 1. This creates a more responsive average that reflects recent price movements better than simple moving averages, which treat all data points equally.

In trading and technical analysis, the LWMA can be particularly useful for identifying trends more quickly, making it a favored tool among traders who want to react to market changes promptly.