# The Hull Moving Average – a better MA

A moving average is one of the most commonly used technical analysis tools. Many kinds of them exist. A Simple Moving Average (SMA) is the most basic one though, it shows the biggest lag. Then we have, for example, the Exponential Moving Average (EMA) or the Weighted Moving Average (WMA). They focus more on recent data and so the lag is reduced a bit. And how about the Hull Moving Average (HMA)? Have you heard about it or it is something new to you? Today, I am going to explain how the HMA works.

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## The basics of the Hull Moving Average

The name of this tool derives from the name of its designer that is Alan Hull. His moving average is characterised by speed and smoothness and so the lag is almost completely eliminated.

### Adding the HMA to the Binomo chart

To use the HMA in trading on the Binomo platform, you must be logged in to your account. You should also decide what kind of asset you are going to trade. Then click on the indicators icon and select a Moving Average as the trading instrument. Choose the Hull type and click on a yellow Apply button.

The Hull Moving Average will be added to your chart, and you could start using it in your analysis.

### Hull Moving Average calculations

In order to calculate the HMA you should follow these steps:

First, calculate a Weighted Moving Average with a period of n/2 and multiply it by 2.

Then, calculate a WMA with a period of n. Subtract it from the result of calculations from the first step.

Lastly, calculate a WMA with a period of sqrt(n).

WMA (2*WMA(n/2) – WMA(n) ) sqrt(n) = HMA

### Using the Hull Moving Average in trading

The Hull Moving Average can be used, among others, to identify the trend and obtain trading signals.

The HMA with a long period, for example, 200, may help traders to define the trend. When the line of the moving average is moving upwards, there is an uptrend in the market. The falling line of the HMA informs about the downtrend.

When you apply the Hull Moving Average with the shorter period, for example, 20, it may produce trading signals. Look for the opportunities to go long when the overall trend is up and the HMA line turns up. Go short when the indicator’s line turns down during the overall downtrend.

## Conclusion

The Hull Moving Average invented by Alan Hull significantly reduces the lag by prioritizing the most recent values. It is more responsive and stays close to the price bars.

The HMA can be used in technical analysis to recognise the trend and the changes in the trend. Trading signals are produced at the turning points. The HMA creator does not recommend trading with the crossovers of the HMA with another moving average because this method is based on the differences in lag and here the lag has been already deeply diminished.

Naturally, you may combine the Hull Moving Average with other technical analysis tools to confirm the signals received.

Practice on the Binomo demo account which is offered for the platform users completely for free. In a risk-free environment, you have the chance to see how new indicators and strategies work. Use this opportunity well!

Good luck!