Hull Moving Average Cloud v2

The Hull Moving Average Cloud v2 indicator provides a dynamic trend-following framework that utilizes an adaptive Hull Moving Average (HMA) configuration to identify momentum shifts and price reversals. This tool differentiates itself from standard crossovers by calculating a "retracted" cloud that expands and contracts based on market volatility, offering a visual representation of trend strength and potential entry/exit zones.

Usage

The Usage section focuses on identifying trend direction and execution points through the interaction between price action and the HMA cloud.

• Trend Identification: When the cloud is colored green and the price remains above the cloud boundary, the market is considered to be in a bullish phase. Conversely, a red cloud with price action trading below it indicates a bearish phase.
• Entry Signals: The script generates entry signals based on the relationship between previous price data and the cloud boundaries. A long entry (BUY) is triggered when the previous price is above both the primary and secondary cloud lines, while a short entry (SELL) is triggered when the previous price falls below both lines.
• Exit Logic: The strategy includes built-in logic to close positions when price crosses back into the cloud boundary, acting as a trailing mechanism to lock in gains or mitigate losses during momentum shifts.
• Alerts: Users can utilize the integrated alert system to receive notifications for "Bullish Hull Cloud Crossovers" and "Bearish Hull Cloud Crossunders," allowing for real-time monitoring without constant chart observation.

Details

The Hull Moving Average Cloud v2 is constructed using a modified HMA formula. While a standard HMA focuses on reducing lag while maintaining smoothness, this version introduces a "retracted" calculation logic. It calculates the difference between two Weighted Moving Averages (WMA) of varying lengths (HMA Period and Half-Period) and applies a square root of the period for smoothing.

The "Cloud Width" setting creates a vertical offset from the core HMA line. This offset is dynamic; it adds or subtracts the width based on whether the current momentum is increasing or decreasing. This creates the "stretch and shrink" effect seen in the visual cloud. The strategy execution also accounts for exchange commissions (defaulted to 0.075%) to provide a more realistic backtesting result.

Settings

General Settings

• HullMA Period: Determines the lookback period for the core Hull Moving Average calculation. Higher values result in a smoother, slower-reacting cloud.
• Cloud Width: Adjusts the vertical thickness of the cloud. This parameter affects how far the price must move to trigger entries and exits.
• Price data: Specifies the source price used for all calculations (default is OHLC4).

Backtest Window

• From Month / Day / Year: Sets the start date for the strategy's historical execution and performance tracking.
• To Month / Day / Year: Sets the end date for the strategy's historical execution.

FAQ

How do I interpret the colored circles on the chart? The circles represent the exact point where a crossover between the cloud boundaries occurs, signaling a potential change in the prevailing trend direction.

Does this indicator repaint historical signals? No, the script is designed to process data based on completed bars and historical price action to ensure that signals remain fixed once the bar has closed.

How can I access the Hull Moving Average Cloud v2? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.