Hull Moving Average

Calculation of the Hull Moving Average (HMA) is elaborate and makes use of the Weighted Moving Average (WMA). It emphasizes recent prices over older ones, resulting in a fast-acting yet smooth moving average that can be used to identify the prevailing market trend. It can also be used for entry and exit signals.

HMA is an extremely responsive and smooth-flowing average. In fact, HMA almost eliminates lag altogether and manages to improve smoothing at the same time.

The indicator is mostly used by swing traders and by long-term traders in combination with other signals and analysis techniques.

A shorter-period HMA may be used for entry signals in the direction of the prevailing trend. A long entry signal, when the prevailing trend is higher, occurs when HMA turns upward and a short entry signal, when the prevailing trend is falling, occurs when HMA turns downward.

Calculation

First step is to calculate two WMAs:

WMA1 = WMA(n/2) of price (one with half the specified number of periods)

WMA2 = WMA(n) (one with the specified number of periods)

Then calculate a non-smoothed HMA:

Raw HMA = (2 * WMA1) - WMA2

Lastly, smooth the raw HMA with another WMA using the square root of the specified number of periods:

HMA = WMA(sqrt(n)) of Raw HMA