What is the Hull Moving Average (HMA) Indicator?
The Hull Moving Average (HMA) is a moving average developed by Alan Hull that tracks trend direction with less lag than traditional averages while staying visually smooth. It is plotted directly on the price chart as a single line that follows price more tightly than many SMA or EMA settings. Traders read it mainly through its slope (rising for bullish trend pressure, falling for bearish) and through price interaction with the line as dynamic support or resistance.
How is the Hull Moving Average (HMA) Indicator Calculated?
The HMA is built from weighted moving averages (WMAs) and a square-root smoothing step using: HMA(n) = WMA(2 × WMA(n/2) − WMA(n), √n), where n is the lookback period, WMA(n/2) is the WMA of price over half the period, and √n is the final smoothing length (both typically rounded to whole bars). A common default input is n = 16 periods, applied to closing price.
- Compute WMA(n/2) and WMA(n).
- Form the “speed” series: 2 × WMA(n/2) − WMA(n).
- Apply WMA(√n) to that series to get the final HMA line.
How to Use the Hull Moving Average (HMA) Indicator in Trading?
To use the HMA in trading, treat it as a trend filter and trigger line: trade in the direction of the line’s slope and use price crosses or HMA crossovers to time entries and exits. The core idea is that a rising, responsive average confirms sustained buying pressure, while a falling one confirms sustained selling pressure.
- Trend filter: take longs when price is above the HMA and the HMA is rising; take shorts when price is below and the HMA is falling.
- Price cross trigger: a close back above the HMA after a pullback signals trend continuation; a close below it signals breakdown or exit pressure.
- Dual-HMA crossover: use a fast HMA and a slow HMA; go long on a fast-over-slow crossover and exit or short on a fast-under-slow crossover.
- Stops and invalidation: place the stop beyond the most recent swing low/high or beyond the HMA after a clean break, since a decisive cross shows momentum has flipped.