Overview
What is Hull Moving Average (HMA)?
The Hull Moving Average (HMA), created by Alan Hull in 2005, is designed to address the fundamental flaw of all traditional moving averages: lag. Standard SMAs and EMAs are inherently backward-looking, causing entries and exits to occur well after trends have already begun. The HMA dramatically reduces this lag while maintaining a smooth output line.
The formula is: HMA(n) = WMA(2 × WMA(n/2) − WMA(n), sqrt(n)), where WMA is a Weighted Moving Average. By computing the WMA of half the period, doubling it, subtracting the full-period WMA, and then taking the WMA of the square root of the period on the result, Hull created an average that can actually anticipate trends rather than just follow them.
The key difference is visual: while an SMA or EMA turns after the price has already moved, the HMA begins turning at or sometimes before the price reversal. This makes the HMA more suitable for entries and exits than traditional MAs, particularly for swing and intraday traders who prioritise speed.
The HMA also stays smooth even with shorter periods — a 9-period HMA tracks price closely without the noise of a 9-period SMA or EMA. This makes it excellent for identifying momentum shifts at pivotal price levels. Color-coded HMAs (green when rising, red when falling) provide instant visual trend context.