Hull Moving Average (HMA)
The Hull Moving Average, or HMA, is a lesser-known moving average—but one that deserves attention. It was designed to solve a problem that many traders face: how do you get a moving average that’s both smooth and responsive?
Most moving averages force a trade-off. If it’s smooth, it lags. If it’s fast, it’s jumpy. The HMA does something clever. It uses weighted moving averages and a unique formula to create a line that reacts quickly to price changes while staying visually smooth.
It’s not just a fancy average—it’s one of the most efficient ways to track trend direction without the whiplash.
How the HMA Works
The Hull Moving Average was created by Alan Hull and is based on the Weighted Moving Average. Its formula reduces lag while maintaining a clean look on the chart.
Here’s a simplified version of how it works:
It calculates a WMA of half the period you specify.
Then it doubles that value and subtracts the full-period WMA.
Finally, it smooths that result with a square root of the period.
This may sound technical, but you don’t need to calculate it manually—your charting software handles all the math. What matters is how the HMA looks: it sticks close to the price when the market is moving fast and smooths out beautifully when the trend is stable.
Here’s how it compares to other moving averages:
How Traders Use It
The HMA is often used as a trend-following tool. When the HMA is angled upward and price stays above it, that’s usually seen as bullish. When it turns downward and price falls below it, it may signal a bearish shift.
Because of how responsive it is, the HMA is perfect for fast-paced environments where traders need confirmation without delay. It can also be used to find entry points on pullbacks or as a trailing guide for exits during a trend.
Example Setup
Let’s say you’re trading a 15-minute chart using a 21-period HMA. The price is climbing steadily, and the HMA turns upward and begins to follow closely behind. As long as the price stays above the HMA, it acts as confirmation to stay in the trade. If the price closes below it and the HMA flattens or turns down, that could be your signal to exit.
You can also combine the HMA with oscillators like RSI or MACD for stronger setups. It’s a flexible tool that adapts to how you trade.
Pros and Cons of Using HMA
Pros
- Responds quickly to market changes with minimal lag
- Visually smooth, making charts easier to read
- Excellent for active traders who rely on speed and clarity
- Works well as both confirmation and signal line
Cons
- Slightly more complex in terms of calculation
- Not as widely supported on all trading platforms
- May react to fakeouts in highly volatile conditions
When to Use the HMA
The HMA shines in trending markets where clarity and quick reactions are needed. It’s ideal for traders who want a fast-moving average that still provides a clean, stable line. Whether you’re trading short-term charts or watching for trend continuations, the Hull Moving Average gives you a reliable edge.
It’s not the most mainstream indicator out there—but once you try it, you might wonder how you traded without it. Learn the Parabolic SAR NEXT!!