Double HULL Moving Average

The Double HULL Moving Average indicator provides a dual-layered trend-following system that combines two Hull Moving Average (HMA) lines to identify momentum shifts and potential entry or exit points with reduced lag.

Usage

The Usage section focuses on identifying trend direction and crossovers between the two moving average components. Traders typically use this tool to determine market sentiment based on the interaction between the fast and slow HMA lines.

• Bullish Signal: A bullish crossover occurs when the shorter-period HMA (blue line) crosses above the longer-period HMA (red line). This indicates accelerating upward momentum.
• Bearish Signal: A bearish crossover occurs when the shorter-period HMA crosses below the longer-period HMA. This indicates increasing downward pressure.
• Trend Filtering: The slopes of the two lines can be used to gauge the strength of a trend. When both lines are moving in the same direction, the trend is considered well-established.

The default periods are set to 8 and 21, which are Fibonacci numbers often used for short-to-medium-term trend analysis.

Details

The Double HULL Moving Average is based on the Hull Moving Average formula developed by Alan Hull. The HMA is specifically designed to reduce lag while maintaining significant smoothing. It achieves this by using weighted moving averages (WMA) and a square root calculation of the period to determine the final smoothing factor.

By plotting two HMAs with different periods on a single chart, this tool allows for a crossover strategy that is more responsive than traditional Simple Moving Average (SMA) or Exponential Moving Average (EMA) crossovers. This implementation also optimizes script usage for traders on platforms with limited indicator slots by combining two separate calculations into one overlay.

Settings

• Longer Period: Sets the lookback period for the slow HMA line (default is 21). A higher value increases smoothing but increases lag.
• Shorter Period: Sets the lookback period for the fast HMA line (default is 8). A lower value makes the line more responsive to recent price changes.

FAQ

How does the Hull Moving Average differ from a standard Moving Average? The Hull Moving Average is designed to almost eliminate lag while simultaneously improving smoothing. It is more reactive to price changes than SMAs or EMAs, making it effective for identifying turning points quickly.

Which timeframes are best for the Double HULL Moving Average? While it can be used on any timeframe, it is particularly effective on intraday and daily charts for identifying swing points. Users should adjust the period settings to match their specific trading style and the volatility of the asset.

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