Technical Glossary / Technical Indicators – Trend Indicators
Hull Moving Average (HMA)
A fast, smooth average that uses weighted averages and the square root of the period.
Formula
HMA(N) = WMA( 2 x WMA(close, N/2) - WMA(close, N) , sqrt(N) ).
Definition
Alan Hull's moving average tries to be both smooth and quick. The inner term, twice a half-length WMA minus a full-length WMA, is a lag-reduced series. A WMA of that series, of length equal to the square root of N, smooths the result. The line can hug a trend without the staircase look of a short SMA.
How it works
The square-root length is what keeps the final smoothing short. A 16-period HMA finishes with a 4-period WMA of the lag-reduced series. Change N and both layers change. It will still whip in a range. Smoothness is relative to other averages of similar lag, not an absolute.
How traders use it
Traders use the colour change or the slope change of the HMA as a trend filter, and use a long HMA the way they would use a long EMA. Confirm the turn with structure if the slope change is your only trigger. The average can curl a bar before the swing is real.
Common mistakes
Treating an HMA colour flip as a reversal signal against a higher-timeframe trend. It is a fast average. It flips.
Limitations
The formula is more complex than an SMA, which makes it easier to trust too much. Complexity is not information the SMA was missing. The market input is still the close.
This note explains the term. A sketch shows the shape of the idea. Neither is a recommendation, a signal, or a comment on any security. Indicator settings and exchange conventions differ. Check the live chart and the contract specification before you use a number.