Hull Moving Average and Daily Candle Crossover

The Hull Moving Average and Daily Candle Crossover indicator provides a trend-following framework that combines the low-lag smoothing of the Hull Moving Average (HMA) with daily price momentum filters to identify potential market entries and exits.

Usage

The Usage section describes how the script can be used to identify trend direction and potential reversal points. Users can monitor the relationship between the two plotted HMA lines and the price action to determine market sentiment.

• Trend Identification: When the primary HMA line (n1) is above the secondary line (n2), the trend is considered bullish. Conversely, when n1 is below n2, the trend is considered bearish. The space between these lines is color-coded to provide a visual representation of the current trend strength and direction.
• Entry Logic: The script triggers long entries when the HMA shows sustained upward momentum (n1 > n2 for multiple bars), the price is trading above the HMA, and the daily Rate of Change (ROC) exceeds a specific threshold. Short entries occur under the opposite conditions.
• Exit Strategy: Positions are closed based on trend reversals (cross-overs of the HMA lines sustained over time) or when specific monetary stop-loss and target-point thresholds are met.

Details

The script is based on the Hull Moving Average, developed by Alan Hull, which utilizes weighted moving averages to reduce lag while maintaining a smooth curve. It calculates the HMA by taking the difference between two WMAs with different periods and then smoothing the result with a third WMA.

To improve signal reliability, this tool implements a "Daily ROC" filter. This filter ensures that trades are only taken when there is a minimum level of daily price movement, helping to avoid entries during low-volatility or sideways market conditions. The logic also incorporates a lookback period for the HMA crossover to ensure the trend shift is confirmed before an execution occurs.

Settings

General Settings

• HullMA: Sets the length used for the Hull Moving Average calculation. Adjusting this value changes the sensitivity of the indicator to price movements.
• Stop Loss in $: Defines the maximum loss in currency units for a single trade before the position is automatically closed.
• Target Point in $: Defines the profit target in currency units at which the position will be closed.
• Price data: Determines the source price used for the calculations (e.g., Close, HL2, OHLC4).

FAQ

How do I interpret the colored cloud between the lines? The cloud highlights the relationship between the two HMA components. A green cloud indicates a bullish crossover with upward momentum, while a red cloud indicates a bearish crossover with downward momentum.

Why does the signal appear to have a slight delay? The script is designed to wait for a confirmed trend by checking conditions over multiple preceding bars. This intentional lag helps filter out "noise" and prevents frequent whipsaws in volatile markets.

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