Hull Moving Average Formula and Responsiveness

Summary

The document introduces the Hull Moving Average (HMA), a price-smoothing indicator developed by Alan Hull. It explains the design goal: respond more quickly to recent price changes while keeping a smooth curve, addressing the lag often associated with moving averages.

The supplied example combines weighted averages over half-length and full-length windows, then smooths their difference over a window based on the square root of the period. The example uses a period of 16. The text asserts that this construction reduces lag and improves smoothing, but it provides no charts, tests, or comparative evidence to quantify those claims. It also does not describe a trading rule, asset class, or parameter-selection method, so the indicator’s effectiveness in any specific market remains unestablished.

Key ideas

• The HMA is designed to make a moving average more responsive while retaining smoothness.
• Its construction uses weighted averages over half-period and full-period windows.
• A final weighted average smooths the intermediate series over a square-root-based period.
• The document gives a period-16 example but no empirical validation or trading rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.