Hull Moving Average (HMA) indicator Guide for MT4/MT5

Hull Moving average indicator for MetaTrader was designed in 2005 by Alan Hull in order to improve the standard Moving Average varieties. In fact, this tool aims to reduce the lag issue in order to boost the MA responsiveness to price action on a smoother visual field. The Weighted Moving Average has involved in the Hull (HMA) indicator calculation in MT4. Usually, this analytic tool seeks to recognize the dominant market trend by emphasizing the most recent prices over the oldest. As a result, a quick but smooth HMA line is obtained. The Hull Moving Average (HMA) indicator for MT5 is especially used by long-term traders to obtain entry swing signals. Yet, it’s also utilized by day and forex traders. Moreover, the Hull moving average (HMA) strategy is an advanced Tradingview indicator of its cousins.

What is HMA indicator ?

There are three default categories of moving averages in the MetaTrader platform. First, there’s the Simple Moving Average. To explain, SMA is the most price lagging category of all moving averages. Thus, chartists have developed more advanced categories, such as weighted and exponential moving averages, in order to minimize this lag issue. To explain, the idea was to emphasize the most recent price data. Yet, the lagging issue persisted, until Alan Hull introduced his new version of the moving average (HMA) indicator. To explain, this MA was extraordinarily fast and smooth at the same time. For real, it almost eliminated price lags and also enhanced smoothing.

Compared to traditional MA lines, you can notice that the Hull moving average (HMA) strategy results in faster and smoother readings. To clarify, the HMA line is more responsive to price movement. That’s why most chartists consider the HMA strategy relatively best for decision-making than the default MetaTrader Moving Average varieties.
In short, the HMA indicator minimizes price lags associated with Simple, weighted, and exponential MAs and enhances smoothing simultaneously!

Hma indicator formula

Now, let’s study the Hull moving average calculation. Note that the HMA calculation involves the weighted MA.
Firstly, compute the raw HMA. To do so, calculate the first WMA considering a period of ( n / 2) and multiply it by 2. Then calculate the second WMA considering a period of ( n ). Afterward, subtract the latter from the first WMA. Thus, the raw Hull MT5 Moving Average is obtained. To explain, the :

The Raw Hull MA = [ 2 x WMA ( n / 2 ) − WMA ( n ) ]

Secondly, compute the weighted moving average considering a period of ( sqrt ( n ) ) using the Raw HMA. Finally, we get the Hull Moving Average. To clarify, we smoothed the raw HMA with the WMA using the square root of the n period.

The Hull MA = WMA { [ 2 x WMA ( n / 2 ) − WMA ( n ) ], sqrt ( n ) } = WMA { [ Raw HMA ], sqrt ( n ) }

Consequently, the HMA calculation is a long process. Fortunately, this (HMA) indicator for MT4 directly calculates and draws the Hull moving average.

How does HMA reduce price lags ?

The Hull indicator reduces price lags on your charts for three main reasons:

First, WMAs intrinsically decrease price lags. Because it places further weight on the most recent price data.
Second, the lag is also lowered by subtracting one weighted moving average that covers the whole period from another WMA that covers only the most current half of that period. Because this puts further emphasis on the most current price data.
Third, smoothing the raw HMA with another WMA that considers an even shorter period ( square root) reduces price lags. This smoothing puts further intensity on the most recent data.

All of this places further weight on the most recent price data. As a result, a fast and smooth moving average is obtained thanks to Hull (HMA) indicator for Tradingview. In short, the HMA level follows closely and quickly the price activity.

How to use it ?

The Hull moving average (HMA) strategy could be utilized with different periods. In fact, Forex and CFD traders could set shorter periods to get forex day trading signals. Otherwise, they could set longer periods to get swing signals. This section will clarify how to trade different periods with the Hull moving average (HMA) indicator.

Intraday signals

A short period with the Hull moving average (HMA) indicator is useful to identify entry points in the prevailing direction. On the one hand, when the HMA level turns up and the general trend is bullish, there is a long signal for entry. On the other hand, when the dominant trend is bearish and the HMA MT5 indicator turns down, there is a short signal for entry. In short, there are entry signals when the short period Hull indicator turns towards the prevailing market direction in the MT5 chart. Also, these signals are for forex day trading.

Swing signals

A longer period with the Hull moving average (HMA) is helpful to recognize the current overall trend. From one part, if the HMA level is growing, then the existent general trend is also upward. Consequently, chartists could initiate long positions. From the other part, if the HMA is dropping, then the recent overall trend is falling as well. As a result, swing traders have better open short positions. In short, swing signals are initiated in the same direction as the long period Hull indicator.

Download Hull moving average indicator for MT4

Hull Moving Average 2 (HMA) Indicator for MT4 gives swing trading signals. In other words, they employ it to identify the long-term trend in the MetaTrader 4 platform. To explain, if the HMA value and the price are both increasing, it is then better to initiate a buy position. However, if the price is decreasing and the HMA is declining as well, then it is better to enter a sell trade. Thus, the Hull moving average (HMA) indicator for MT4 best suits swing trading strategies.

Download Hull moving average indicator for MT5

Hull moving average arrows indicator for MT5 exhibits Arrow Signals along with the HMA line in the MetaTrader 5 chart. On the one hand, upward arrows are long signals. On the other hand, downward arrows are short signals. Keep in mind that the higher the HMA period the stronger is the signal.
If the price retains closing below the MT5 HMA indicator, then a bearish move is confirmed. In other words, it is an entry sell signal. Consequently, the HMA level turns to a red color. Also, a downward arrow emerges above the price candle. otherwise, a bullish move is approved and an entry buy signal arises. In this case, the HMA level shifts to the blue color, and an upward arrow materializes below the price candle. Thus, the Hull moving average (HMA) is an MT5 indicator with arrows that designate entry points.

Conclusion

The HMA slope of the Hull Moving Average indicator is the principal signal. This MetaTrader indicator is better in catching early reversals than the other moving average varieties. Because, it is so fast, yet smooth altogether. Note that, there are many forex trading strategies based on the Hull indicator for Tradingview like the Moving Average crossover strategy. Furthermore, some chartists use the HMA strategy to project upper and lower levels.

Key takeaways

Hull indicator for MetaTrader reduces the price lags compared to other standard moving average types.
The Hull (HMA) indicator is lag resistant and noise resistant at the same time compared to any other moving average on the Tradingview trading platform.
Long-term traders use the MT4 HMA sloping as a swing trading signal.
Short-term traders use the change in the slope direction as a day and forex trading signal in MT5 charts.

November 22, 2023