Hull moving average trading system

Converted the hull suite into a strategy script for easy backtesting and added ability to specify a time periods to backtest over. This screens for Hull MA trend reversal's in 10 different securities. If the label color is not visible due to the text in it being white colored, then choose a different color from settings.

Also added a simple HullMA to it. If want can increase it upto 40 securities in the code which is upto user to decide.

This was requested by soderstromkenan in comments and Explanation of all the Method" that I found in forexfactory forums: www. This strategy has a Fisher-Transform indicator applied to the highs and lows of a Hull moving average instead of the price. The base of the strategies entry and exit Moving averages are perhaps the most popular indicator in technical analysis.

Mathematics and parameters

But sometimes they're not the easiest to interpret. This indicator helps you see the trend by coloring the MA based on its direction. It's green when rising and red when falling. Of course, you can easily change that in the Style tab under Settings. Color MA also lets you select from A Hull moving average is applied to the chart with settings for user to change the period of the Hull MA.

And a value of a previous candle is compared to the HMA. A shorter period HMA may be used for entry signals in the direction of the prevailing trend. A long entry signal, when the prevailing trend is rising, occurs when the HMA turns up and a short entry signal, when the prevailing trend is falling, occurs when the HMA turns down. Technical analysis focuses on market action — specifically, volume and price.

Technical analysis is only one approach to analyzing stocks. When considering which stocks to buy or sell, you should use the approach that you're most comfortable with.

As with all your investments, you must make your own determination as to whether an investment in any particular security or securities is right for you based on your investment objectives, risk tolerance, and financial situation. Past performance is no guarantee of future results. Skip to Main Content. Search fidelity. If the moving average is rising and the stock price is primarily staying above that average, the stock is in an uptrend and vice versa for a downtrend.

Moving averages on volatile data like stocks can become jagged when moving average lengths are shortened to move more in line with the stock. Figure 1 shows a chart using a four-period moving average. On this chart, notice how jagged the line is and how price frequently cuts above and below it.

Hull Ma An Improved Moving Average

For illustrative purposes only. Past performance does not guarantee future results. To address this, traders can lengthen the period used for the moving average. Figure 2 shows the same moving average but with 16 periods. On this chart, n ote the jaggedness is gone, but you now have a moving average that greatly lags price movement.

The moving average turned down see green arrow 12 days after price turned down see red arrow. Chart source: the thinkorswim platform from TD Ameritrade. To address these two issues, Allen Hull created a new moving average calculation in called the Hull Moving Average HMA , which aimed to reduce this lag time. Figure 3 graphs three moving averages Hull, weighted, and simple each using the same length for calculation 16 periods. The red line is the Hull, orange line is the weighted, and the green line is the simple.

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All three moving averages suggest an uptrend until the first candle highlighted in gray. At that point, the HMA was suggesting a potential trend change as price broke below it.

Three days later, the weighted moving average WMA suggested a change in trend as price broke below it second gray highlighted candle. The simple moving average SMA was way behind, not suggesting a change in trend until five days after the weighted moving average and eight days after the Hull moving average signaled a potential change. Traders sometimes look for the moving average to change direction before confirming a trend change.

Figure 3 is illustrating a major benefit of the HMA—it has the same type of smoothness as the weighted and simple and thus reduces and practically eliminates lag times found in other moving averages.