Hull Kaufman SuperTrend Cloud (HKST Cloud)

The Hull Kaufman SuperTrend Cloud (HKST Cloud) indicator is a trend-following system that combines three distinct technical overlays into a unified dynamic range to identify momentum shifts and support/resistance zones. By synthesizing the Kaufman Adaptive Moving Average (KAMA), a Hull Moving Average of the KAMA, and the SuperTrend, it provides traders with a comprehensive visual "cloud" for long-only trend entries and exits.

Usage

The HKST Cloud is primarily used to capture expansive trending moves while filtering out minor market fluctuations. The indicator calculates an upper and lower boundary based on the highest and lowest values of the three integrated components.

• Long Entry: A long position is initiated when the high of a candle crosses above the upper band of the cloud. This ensures that the price shows sufficient upward momentum to overcome the combined resistance of the three indicators.
• Exit Strategy: Positions are typically closed when the low of a candle crosses below the lower band of the cloud. This acts as a trailing stop that adjusts based on volatility.
• Secondary Exit: If the candle's low never exceeds the upper band but the market reverses, a close below the lower band also serves as a liquidation signal.

Details

The HKST Cloud's effectiveness stems from the synergy of its three components:

• Kaufman Adaptive Moving Average (KAMA): Designed to account for market noise, the KAMA follows prices closely during trending periods but flattens out during consolidation.
• Hull Moving Average (HMA): By applying a Hull Moving Average to the KAMA, the tool smooths out the adaptive average's response. This "rounding" effect helps contain false continuation signals during transitions from high to low volatility.
• SuperTrend: This component adds a volatility-based floor and ceiling using the Average True Range (ATR). It provides a more stagnant boundary compared to moving averages, acting as a reliable structural anchor for the cloud.

The final cloud is formed by taking the maximum value of these three lines for the upper band and the minimum value for the lower band.

Settings

• Kaufman Length: Sets the lookback period for the Kaufman Adaptive Moving Average (Default: 20).
• Hull Length: Determines the smoothing period for the Hull Moving Average applied to the KAMA (Default: 20).
• ATR Factor: The multiplier used to calculate the SuperTrend distance from the price (Default: 2.0).
• ATR Period: The lookback period for the Average True Range calculation within the SuperTrend component (Default: 5).

FAQ

How do I use the HKST Cloud for entries?

Entries are signaled when the current price high crosses over the upper boundary of the cloud, indicating a bullish breakout confirmed by the confluence of the adaptive averages and SuperTrend.

What makes this different from a standard SuperTrend?

Unlike a standard SuperTrend, the HKST Cloud incorporates adaptive moving averages to smooth the signal and reduce "whipsaw" entries during low-volatility periods.

How can I access the HKST Cloud?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.