Hull Moving Average

What it measures

The Hull Moving Average, developed by Alan Hull, is specifically engineered to solve the fundamental tradeoff every moving average faces: smoothing versus lag. Standard moving averages that are smooth enough to filter noise are also slow enough to lag price significantly. HMA uses a clever combination of weighted moving averages (a longer WMA, a shorter WMA at half the period, and a square-root-period smoothing pass) to stay both notably smoother AND notably closer to live price than a standard SMA or EMA of the same period.

How readings are interpreted

Because it hugs price more closely than conventional moving averages, HMA reacts to genuine trend changes faster while still filtering out a meaningful amount of noise. Price crossing the HMA, or the HMA changing slope, are read the same way as with any other moving average — just with less lag before the signal appears.

Conventional levels

• Price crosses above HMA: bullish signal, generated earlier than the equivalent SMA/EMA crossover would fire
• HMA slope turning from falling to rising: an early trend-change read
• HMA hugging price closely during a strong trend: confirms trend strength with minimal separation

Where it works, and where it does not

Useful in essentially any context where a standard moving average would be used, but where reducing lag specifically matters — trend-following entries, dynamic support/resistance, or as a faster-reacting trend filter layered alongside a slower, more traditional moving average.

Commonly read alongside

• EMA/SMA: A common approach pairs a fast HMA with a slower traditional MA for a lag-reduced version of a classic dual-moving-average crossover system
• ADX: HMA slope changes are more trustworthy as trend signals when ADX confirms a genuine trend is present
• Supertrend: Both are designed to reduce whipsaw/lag relative to simpler tools — worth comparing signals between them

Known limitations

• Reduced lag comes with a tradeoff of being somewhat more prone to noise-driven whipsaws than a standard, slower-moving average
• The underlying formula (nested weighted averages with a square-root smoothing pass) is considerably less intuitive to explain than a simple SMA
• Less universally used than SMA/EMA, so fewer other market participants are watching the same HMA levels

In practice

• Use in place of a standard MA specifically when reducing lag matters more than maximum smoothness
• Works well as the "fast" line in a dual-moving-average crossover system, paired with a slower traditional MA
• Because it's more reactive, expect somewhat more frequent signals than an equivalent-period SMA — size position/confidence accordingly
• A reasonable default choice for trend-following systems that have found standard EMAs too laggy for their taste