Hull Moving Average is a trend following indicator.

Being a trend following indicator, Hull Moving Average indicator was created by Alan Hull with the main objective of eliminating lag thus ensuring smoothness curve movement thus helping traders to easily identify support and resistance point thus they know when to enter and exit the market.Hull Moving average indicator is further considered to be a lagging trend indicator.

According to Alan Hull, the values of Hull Moving average indicator is therefore calculated using the following formula;

Hull Moving average = integer(squareroot(period) ) WMA{2* integer(period/2)WMA(price)-period WMA(PRICE)}

 

Since Hull moving average is a lagging trend following indicator it therefore follows that when the hull moving average indicator is moving upwards,the market will also be trending upwards while when the hull moving average indicator is trending downwards,the market will also be in a downwards trend.Based on support and resistance, When the price rises above the hull moving average when both the market and hull moving average are in an upward movement, a reversal movement will occur thus the two will now be in a downward movement direction.On the other hand,when the price falls below the hull moving average when both the market and the hull moving average are in a downward direction,a reversal movement will occur and the two will now be in an upward direction.This is indicated as from the candle sticks chart below;

 

 

 

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From the candle sticks chart above, there are 3 points, point A,B and C. Point A and B are the support and resistance points while point C which is a green curve line is the hull moving average.At point A, the market and the hull moving average were initially moving downwards. The price in the market then falls below the hull moving average thus resulting to an upward reversal for both the market and the hull moving average.This will signal the trader to close any sell position and open a buy position since the movement will now be upward.At point B, the market and the hull moving average were initially moving upwards. The price in the market then rises above the hull moving average thus resulting to a downward reversal for both the market and the hull moving average.This will signal the trader to close any buy position and open a sell position since the movement will now be downward.

 


Recommendation:If you are a day trader just use 1 min, 5 min, 15 min and 30 min timeframe while if you are a swing trader just use 1 hour and above timeframe if you want hull moving average indicator to work well for you.

 

 

 

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