Forex MT4/MT5 Indicators Forex Indicators Download Free
The HMA (Hull Moving Average) indicator is a popular indicator who used by traders in the financial markets. It was developed by Alan Hull and first introduced in 2005.
The HMA is a trend-following indicator that uses weighted moving averages to smooth out price fluctuations and provide a clearer picture of market trends.
How does the HMA Buy Sell Signal work?
The idea behind the HMA is based Pivot Boss PDF on calculating a weighted moving average using WMA (weighted moving average) with different periods.
The formula for calculating the WMA takes into account both past and current prices, giving more weightage to recent data points.
Hull Moving Average Indicator for MT4
As an example, let’s say we want to calculate a 20-period Hull Moving Average. First, we need to calculate two WMAs – one based Hull Moving Average EA on half of the period length (10), and another based on square root of period length (4).
We then subtract these two WMAs Entry Stop Loss Target from each other and add it back as an offset against a third WMA calculated with full period length (20).
Interpreting Signals from the HMA Indicator
The main signal generated by the HMA indicator is when there is a crossover between its line and price action. When prices are above the HMA line, it indicates an uptrend, while prices below indicate a downtrend.
Traders often use this crossover as confirmation Holy Grail for trade entries, along with other technical indicators or price action analysis.
Zero Lag Hull Moving Average with Arrows
Another way to use the HMA indicator is by looking at its slope. A steep slope indicates a strong trend, while a flat line suggests consolidation or indecision in the market.
Traders can also look for divergences Vertex Alerts Arrows between the HMA and price action to identify potential trend reversals.
calculations and formula used in the HMA indicator
The calculation of the HMA indicator is based on a combination of weighted moving averages, making it more responsive to changes in price compared to traditional moving averages.
The formula for calculating the HMA is as follows:
HMA = WMA(2*WMA(n/2) – WMA(n)), sqrt(n))
Where:
WMA – Weighted Moving Average
N – number of periods
To get a better understanding of how this formula works, let’s break it down into smaller parts.
1. Weighted Moving Average (WMA)
A weighted moving average gives more weight or importance to recent data points, making it more responsive to current price movements. In contrast, Stochastic Indicator a simple moving average gives equal weight to all data points in the period.
- n/2
This refers to half the number of periods used in calculating the HMA. For example, if we are using a 20-period HMA, n/2 would be 10.
- 2*WMA(n/2)
This simply means multiplying the WMA calculated from step two by two.
- WMA(n)
This is another WMA calculation but using all n periods instead of just half.
- 2*WAM(n/2) – WAM(n)
Subtracting these two calculations results in a smoother line Jebatfx Breakout that reduces lagging and provides quicker signals for traders.
- Square root of n
Taking the square root of n smoothens out any remaining noise and further improves the accuracy and responsiveness of the indicator.
