Hull MA System

Start with HMA(20) or HMA(21) for daily charts. This is the standard that works well for most traders. Shorter (9-14) for active trading; Longer (50-100) for position trading.

HMA dramatically reduces lag compared to EMA while maintaining smoothness. EMA still follows price; HMA can actually lead price during reversals. HMA uses a unique formula with WMAs and extrapolation.

Color change (typically green to red or vice versa) indicates HMA direction change. Green = rising/bullish; Red = falling/bearish. This is the primary trading signal.

Common methods: 1) Below recent swing low, 2) Entry - 2×ATR, 3) Below HMA if using HMA as trailing stop. Don't rely solely on HMA direction change for exits - it may be too late.

No, HMA struggles in ranging/choppy markets with many false signals. Add ADX filter (>20) to confirm trending conditions, or increase HMA period to filter noise.

HMA can 'overshoot' or lead price during reversals due to its extrapolation formula. Handle by waiting for price confirmation (price above HMA for longs) instead of trading immediately on HMA turn.

Use fast HMA (9-14) and slow HMA (21-50). Buy when fast crosses above slow; Sell when fast crosses below slow. Both rising = strong trend. Filter: Only trade if slow HMA in favorable direction.

HMA works well alone in trending markets, but adding filters improves results. Recommended: ADX for trend strength, higher timeframe HMA for direction, volume for confirmation.

HMA(n) = WMA(√n) of [2×WMA(n/2) - WMA(n)]. For HMA(20): Calculate WMA(10), WMA(20), then 2×WMA(10) - WMA(20) = Raw. Finally WMA(4) of Raw values = HMA.

Hybrid approach: Exit half when HMA flattens or price crosses below HMA; Trail rest with ATR stop or until HMA direction changes. This balances profit protection with letting winners run.

Adjust HMA period based on volatility: Period = Base × (Average ATR / Current ATR). In high volatility, period decreases for responsiveness. In low volatility, period increases to filter noise. Recalculate periodically.

Hull Oscillator = HMA(fast) - HMA(slow). Positive = bullish momentum; Negative = bearish. Zero crossover = trend change. Use for timing entries within established trends or as momentum confirmation.

Track HMA breadth (% of stocks with rising HMA). Above 70% = bullish, increase equity. Below 30% = bearish, reduce exposure. Weight individual positions by HMA slope steepness.

HMA fails in: 1) Ranging markets (frequent false signals), 2) Around major news (gaps bypass HMA), 3) During overshoot (leads price then reverses). Use ADX filter, respect S/R levels, avoid news periods.

Need n + √n periods for stable HMA. Detect direction changes using 3 consecutive values. Test multiple periods with walk-forward optimization. Account for slippage. Compare to simple MA strategies for baseline.