Hull Moving Average (HMA) Explained : Price Analyses

Hull Moving Average (HMA) Explained

The Hull Moving Average (HMA) is a moving average that is significantly more responsive than a standard moving average while also working to eliminate false signals. The HMA makes use of a weighted moving average in an effort to be more responsive to more recent prices than older prices.

hull moving average hma

How to trade using the Hull Moving Average (HMA)

Unlike the simpe moving average, the intention of the HMA is to give timelier, more relevant signals. It’s a known fact that simple averages lag, which means that they cannot be used for forecasting future prices. However, as the HMA uses a weighted moving average, one can expect the HMA to lag less than the simple moving average.

One way you can start using the HMA as part of your trading strategy is to look for moving average crossovers, with two HMA lines used to generate signals. When the faster HMA crosses above the slower HMA, this could be considered a buy signal; the inverse is true if selling or going short.

The final way the HMA can be used is in conjunction with other indicators that measure momentum such as the MACD, RSI, or volume-based indicators like the on-balance volume (OBV).

In short, the HMA is one of the various moving-average indicators available to you courtesy of Trading View. It’s faster and more responsive than simple moving averages and intends to give timlier signals. The indicator, however should not be used in isolation.

Matthew North

I have a passion for trading, behavioral finance, technology, travel, and writing. Contact:

Leave a Reply

Your email address will not be published. Required fields are marked *