Ehlers Hann Moving Average

The Ehlers Hann Moving Average indicator provides a high-clarity trend filtering solution by applying a Hann windowing function to price data to minimize noise while maintaining a superior smoothness-to-lag ratio.

Usage

The Usage section describes how the script can be used to identify trend direction and momentum shifts. Users can monitor the color-coded plot to determine the current market bias and potential entry or exit points.

• Trend Identification: A green line indicates a bullish trend, while a red line indicates a bearish trend.
• Signal Strength: The indicator distinguishes between standard and strong momentum. Darker colors (Strong Bullish/Strong Bearish) represent accelerating momentum where the distance between price and the filter is increasing. Lighter colors represent decelerating momentum.
• Optimal Conditions: This tool is most effective during sustained trending markets. Due to the inherent smoothing logic, it may experience lag during tight consolidation or choppy price action.

Details

The Ehlers Hann Moving Average is based on the Hann Window Filter concepts developed by John Ehlers. The mathematical foundation involves calculating coefficients using a cosine function: $1 - \cos(2\pi \cdot i / (Length + 1))$.

These coefficients are applied to the source price (typically the Weighted Close) to create a weighted moving average. The "Hann window" approach is specifically designed to reduce spectral leakage and provide a smoother output than a simple moving average (SMA) or exponential moving average (EMA) of the same period. The script evaluates the slope and the difference between the source price and the filter value to determine the four distinct signal states (Strong Buy, Buy, Strong Sell, Sell).

Settings

• Source: Determines the price data used for the calculation (default is HLCC4/Weighted Close).
• Resolution: Allows the indicator to be calculated on a different timeframe than the current chart.
• Allow Repainting?: Toggles whether the multi-timeframe data should recalculate on the current bar, which can impact historical accuracy versus real-time updates.
• Allow Bar Color Change?: When enabled, the chart bars will be colored according to the current trend signal.
• Length: The lookback period used for the Hann window calculation. Increasing this value results in a smoother line with more lag, while decreasing it makes the filter more responsive to price changes.

FAQ

How do I interpret the different colors on the moving average? Dark green represents a strong bullish trend with increasing momentum, light green represents a bullish trend with weakening momentum, dark red indicates a strong bearish trend, and light red indicates a bearish trend with weakening momentum.

What market conditions are best for this indicator? The Ehlers Hann Moving Average performs best in trending environments where its smoothing properties help traders stay in a position without being shaken out by minor volatility.

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