Hull Moving Average Indicator
Platform: MT4 Type: Trend Last update: October 7, 2024The Hull Moving Average Indicator was originally created by Alan Hull in the answer to the problem of lag in standard moving averages. The Hull Moving Average solves the dilemma of making a moving average more responsive to current price activity whilst maintaining curve smoothness.
In fact, the HMA almost eliminates lag altogether and manages to improve smoothing at the same time. To understand how it achieves both of these opposing outcomes simultaneously we need to start with an easily understood frame of reference.
Hull Moving Average (HMA) Formula
Integer(SquareRoot(Period)) WMA [2 x Integer(Period/2) WMA(Price) – Period WMA(Price)]
How to trade with the Hull Moving Average Indicator?
In fact, the Hull Moving Average indicator can be used in many ways. For example, it can be used as a trend direction filter if the number of periods is modified to fit a longer-term trend.
It could also be used in conjunction with another moving average line as a trend reversal gauge based on crossovers. Let me show you the most basic signals provided by that tool.
Buy Signal
A buy signal simply happens when the Hull Moving Average color turns from orange to green. Take a look at the example below:
Sell Signal
A sell signal simply occurs when the Hull Moving Average color switches from green to orange. Take a look at the example below:
