Hull Moving Average: Reducing Lag While Smoothing Price

Summary

The Hull Moving Average is presented as a way to make a moving average react more quickly to price changes while retaining a smooth curve. Its construction combines weighted moving averages: it doubles a shorter-period weighted average, subtracts a longer-period weighted average, and then applies another weighted average over a period related to the square root of the chosen length. This compensation is intended to reduce the lag typical of simpler moving averages.

The source also describes a variant with a speed parameter for adjusting the balance between smoothness and responsiveness, and says its calculation time is designed not to change when the period changes. These are descriptive claims rather than results from a comparative test: no markets, sample periods, or quantitative performance measures are supplied. The indicator is not itself a complete trading strategy, and the text advises experimenting with parameters before using it to make trading decisions. Responsiveness may help identify changing price direction, but practical value depends on the instrument, timeframe, and signal rules.

Key ideas

• The Hull Moving Average combines weighted averages to reduce lag while smoothing prices.
• Its formula uses a shorter weighted average, a longer weighted average, and a final smoothing step.
• A speed setting in the described variant provides another way to tune responsiveness and smoothness.
• The document provides no measured comparison or evidence of trading profitability.
• Parameters should be evaluated in the intended market and timeframe before use.

Tags

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