Hull MA System

20 is the most popular and balanced period. Shorter periods (9-14) are more responsive but noisier. Longer periods (30-55) are smoother but slower. Start with HMA(20) and adjust based on your trading style and timeframe.

HMA has less lag than EMA of the same period while maintaining smoothness. This makes it catch trends earlier. However, it's slightly more complex to calculate. For trend following, HMA often outperforms EMA, but both can be effective.

Color change indicates the HMA direction has reversed. Green to red means HMA stopped rising and started falling (bearish signal). Red to green means HMA stopped falling and started rising (bullish signal). This is a key trading signal.

No. Filter color changes with additional criteria: check higher timeframe alignment, wait for price confirmation, use RSI/MACD confirmation. Trading every color change in ranging markets leads to whipsaws.

Common methods: 1) Below the HMA value with a buffer (HMA - 1-2%), 2) Below recent swing low, 3) ATR-based (1.5-2× ATR below entry). For longs, stop trails below the rising HMA as it increases.

Use short (9), medium (20), and long (55) HMAs. When all three are rising (green), trend is strong. Short crossing above/below medium generates signals. Only trade when long HMA confirms direction. Multiple alignment improves win rate significantly.

Slope measures trend strength. Steep slope = strong momentum. Flattening slope = momentum fading. Slope reversal often precedes color change. Monitor slope for early warning of trend exhaustion.

Use HMA for trend direction, RSI for entry timing. In HMA uptrend, buy when RSI pulls back to 40-50 (not oversold, just reset). Avoid buying when HMA green but RSI overbought (>70). This combination improves results significantly.

HMA is designed to follow trends with minimal lag. In trending markets, it captures direction early and stays with the trend. In ranging markets, frequent direction changes cause whipsaws. Use regime filters to avoid ranging periods.

Trail stop below the HMA as it rises (for longs). Use a buffer (0.5-2% below HMA) to avoid being stopped by minor fluctuations. As HMA rises, your stop rises, locking in profits while letting winners run.

Calculate ATR or volatility measure. When volatility is high (above 80th percentile), extend HMA period (e.g., 25 instead of 20). When low, shorten period (e.g., 16). This maintains consistent signal quality across market conditions.

HMA bands add ATR-based envelopes around the HMA. Upper band = HMA + (1.5 × ATR), Lower band = HMA - (1.5 × ATR). Use for mean reversion when price reaches bands in trending conditions, or as dynamic stop levels.

Steep HMA slope indicates strong momentum - expect faster moves, use shorter DTE (21-30 days). Shallow slope indicates slower progression - use longer DTE (45-60 days). Color change signals may need immediate position adjustment.

Track rolling profit factor by signal type and market regime. If direction change signals show declining PF despite normal trending conditions, edge may be decaying. Compare to simple MA systems - if HMA loses relative advantage, recalibrate.

Testing shows HMA(20) offers best balance of signals and quality. Longer periods (30-55) have higher win rates but fewer opportunities. For portfolio systems with many stocks, HMA(20) provides sufficient signals with good accuracy.