The Exponential Hull Moving Average is similar to the standard Hull MA, but with superior smoothing. The standard Hull Moving Average is derived from the weighted moving average (WMA). As other moving average built from weighted moving averages it has a tendency to exaggerate price movement.
Indicator Description
The Exponential Hull Moving Average is similar to the standard Hull MA, but with superior smoothing. Additional information is available in the research paper “Moving Averages for Financial Data Smoothing” (Aistis Raudys, Edmundas Malčius, and Vaidotas Lenčiauskas – Vilnius University, Faculty of Mathematics and Informatics) where “smoothness” vs. “lag” of different Moving Averages were examined.
A slow moving average lags price but smooth well. On the other hand, a fast moving average smooths poorly but responds well to price changes. The research paper examines which Moving Average with a specified smoothing exhibits the least lag. Comparing 19 different Moving Averages, the Exponential Hull Moving Average provides the ideal balance between smoothing and lag.
A post discussing an approach for balancing smoothness vs. responsiveness is found in our ALMA indicator Spotlight.
Other Library Indicators
A higher timeframe Exponential Hull Moving Average may be used in combination with other tools for technical analysis, such as channel indicators, momentum oscillators, support / resistance levels and volume analysis. For channel indicators, you may review the Commodity Channel Index, Donchican Channel or the Squeeze Channel. A Donchian Channel Strategy was reviewed in our Indicator Spotlight, as was the Squeeze Momentum setup. Furthermore, the Indicator Spotlight looked at how the TDI indicator utilizes the RSI in three timeframes.
For support / resistance, you may consider using Fib retracement levels, using one of our Fibonacci retracement tools, such as the indicator plotting the Prior Day Fibonacci Levels. Our Indicator Spotlight newsletter previously looked at a trading strategy using Fibonacci Retracements.
You may review additional support resistance levels using the Average Range for a daily, weekly or monthly lookback period. This may for example be done using a ADR indicator, alternatively the Weekly Range Projections / Monthly Range Projections. The Indicator Spotlight furthermore reviewed the Average Daily Range Projections.
For volume analysis you may review the Relative Volume indicator. For instruments that lack reliable volume information (FX/Crypto currencies), you may consider using the Relative Ranges indicator, which was discussed this post.
Other that the Exponential Hull Moving Average, our moving average category includes the ALMA, DWMA, Holt EMA, Moving Average Wave, MA Cross, Tillson T3, Trigger Lines. The Indicator Spotlight Newsletter also discussed two options available for defining a Trigger Lines Trend Bias.
Additionally, you may want to review our Trend Analysis and Trend Filters indicators, such as the ADX, ADXVMA, Directional Movement Index (DMI), Efficiency Ratio, Butterworth Filter, Gaussian Filter, Laguerre Filter, Rainbow Filter, Supersmoother Filter and the Supertrend indicator.
The Exponential Hull Moving Average indicator is available for NinjaTrader 8.
