Price-Confirmed Hull Moving Average

The Price-Confirmed Hull Moving Average indicator filters price action through a modified Hull Moving Average (HMA) calculation to provide high-clarity trend direction signals confirmed by price movement. By integrating slope requirements and price persistence, it aims to reduce noise and identify sustainable market shifts.

Usage

The Usage section focuses on identifying trend shifts and understanding the filtered nature of the indicator. Traders can use the color-coded line and optional background highlights to maintain alignment with the prevailing market direction.

• Trend Identification: A green line and background indicate a confirmed bullish trend, while a red line and background signify a bearish trend.
• Confirmation Logic: Unlike a standard HMA that changes color immediately upon slope reversal, this tool requires both a minimum slope change and a corresponding price movement (e.g., price must be higher than the previous close for a bullish confirmation).
• Lag Visualization: The indicator features a unique lag line that appears at recent highs or lows, helping users visualize the duration and magnitude of the "confirmation lag" relative to recent pivot points.

Details

The script is built upon the Hull Moving Average, which is known for reducing lag while maintaining smoothness. However, standard HMAs are prone to "whipsawing" during consolidation. To mitigate this, the Price-Confirmed Hull Moving Average implements three specific layers of filtering:

1. Slope Threshold: The HMA slope must exceed a user-defined "Min Slope Change" to trigger a potential trend change.
2. Price Confirmation: A trend change is only considered valid if the current price is moving in the direction of the new slope.
3. Persistence Counter: The script tracks the "intended trend" and requires the conditions to remain consistent over multiple bars before finalizing a trend change on the chart.

Additionally, the script calculates a "lag count" by searching for significant pivot bars (lowest low for uptrends, highest high for downtrends) between trend changes, providing a historical context for signal timing.

Settings

Main Settings

• Length: Sets the lookback period for the HMA calculation. Higher values result in a smoother line with more lag.
• Source: Determines the price data used for the HMA calculation (e.g., Close, HL2).
• Min Slope Change Required: Defines the minimum vertical change in the HMA value needed to consider a shift in trend. This helps filter out flat or sideways periods.

Visuals

• Show Background Color: Toggles the background highlights that correspond to the current trend direction.
• Background Transparency (%): Adjusts the opacity of the background trend highlights.
• Lag Line Color: Sets the color for the horizontal lag visualization line.
• Lag Line Style: Allows selection between solid, dashed, or dotted styles for the lag line.

FAQ

How do I interpret the horizontal lag line? The lag line projects from a recent price pivot to visualize the distance between a local price extreme and the point where the HMA trend was officially confirmed.

Can I use this for automated alerts? Yes, the script includes built-in alert conditions that trigger when the confirmed trend changes to bullish or bearish.

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