Hull Moving Average Convergence/Divergence

The Hull Moving Average Convergence/Divergence indicator provides a low-lag alternative to the traditional MACD by utilizing Hull Moving Averages (HMA) to identify trend changes and momentum shifts with increased responsiveness.

Usage

The Hull Moving Average Convergence/Divergence (Hull MACD) is used to identify trend direction, potential reversals, and momentum strength. Because the HMA is designed to reduce lag while maintaining smoothness, this indicator often produces signals earlier than a standard Exponential Moving Average (EMA) based MACD.

Users typically look for the following signals:

• Zero Line Crossings: When the MACD line (blue) crosses above the zero line, it suggests a shift toward bullish momentum. Conversely, a cross below the zero line indicates bearish momentum.
• Signal Line Crossovers: A bullish signal is generated when the MACD line crosses above the Signal line (white/foreground). A bearish signal occurs when the MACD line crosses below the Signal line.
• Histogram Analysis: The histogram represents the distance between the MACD and the Signal line. Expanding bars indicate strengthening momentum, while receding bars suggest a potential slowdown or reversal.

For enhanced accuracy, this tool can be paired with a higher-period trend filter, such as a 50-period HMA, to ensure trades are taken in the direction of the primary trend.

Details

The core logic of this script replaces the standard EMAs found in the traditional MACD formula with Hull Moving Averages. The HMA calculation involves a weighted moving average (WMA) of the difference between two other WMAs with different periods, followed by a final smoothing WMA. This specific construction significantly reduces the delay associated with moving averages.

The MACD line is calculated as the difference between the Fast HMA and the Slow HMA. The Signal line is a Simple Moving Average (SMA) of the MACD line, providing a secondary layer of smoothing for crossover detection. The histogram is derived from the subtraction of the Signal line from the MACD line.

Settings

• Fast Length: The lookback period for the shorter Hull Moving Average.
• Slow Length: The lookback period for the longer Hull Moving Average.
• Signal Length: The smoothing period (SMA) used to generate the Signal line from the MACD values.
• Source: The price data point used for calculations (typically the closing price).

FAQ

How does the Hull MACD differ from the standard MACD? The Hull MACD uses Hull Moving Averages instead of Exponential Moving Averages, resulting in significantly less lag and faster reaction times to price movements.

What timeframe is best for this indicator? The indicator is versatile and can be applied to any timeframe; however, users should adjust the Length settings to suit the volatility of the specific instrument being traded.

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