The hull moving average dynamic trading strategy is a trader’s delight in today’s volatility dominated forex market.
The strategy is designed to eliminate lag, which is every trader’s nightmare, thereby allowing for early trend detection.
MetaTrader4 Indicators: 144-period Hull-moving-average.ex4, HAMA_.ex4 (default setting), 20-period Envelopes (standard MT4 indicator)
Preferred Time Frame(s): 30-Minutes, 1-Hour, 4-Hours,
Recommended Trading Sessions: Any
Currency Pairs: Majors (EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, NZD/USD) and currency crosses
Buy Example (click the image for full size):
Long Entry Rules:
Enter a long position when all three conditions are met as shown below:
- When the Hull-moving-average (144) changes color from red to blue.
- When the first bullish candle stick opens and closes above the upper sea-green line of the Envelopes (20) indicator.
- When the HAMA line bars changes color red to blue.
All three conditions should be in place before initiating a buy entry.
Stop Loss For Long Entry: Place stop loss 30 pips below entry price
Exit Strategy/Take Profit For Long Entry:
Exit position(s) when the following chart patterns are in place:
- If the Hull-moving-average (144) changes its color from blue to red, then it is an indication of a possible reversal.
- If the first bearish candlestick opens and closes below the lower line (black line) of the Envelopes (20) indicator.
- The HAMA_ line bars reverts from blue to red color.
At this point, traders need to be sensitive to market sentiments, and the decision of exiting on any or all of the exit conditions is the sole prerogative of the trader.
Sell Entry Rules:
Sell your assets when you notice the following indicator patterns on the activity chart:
- When the Hull-moving-average (144) changes color from blue to red.
- When the first bearish candle stick opens and closes below the lower black colored line of the Envelopes (20) indicator.
- When the HAMA line bars changes color blue to red.
Check that all three conditions have been triggered before entering a sell.
Stop Loss For Short Entry: Place stop loss 30 pips above entry price
Exit Strategy/Take Profit For Short Entry:
Exit your position when the following conditions are observed:
- If the Hull-moving-average (144) changes its color from red to blue, indicating a possible reversal.
- If a bullish candle opens and closes above the upper sea-green line of the Envelopes (20) indicator.
- The HAMA_ line bars reverts to blue from red.
About The Trading Indicators
The “Hull Moving Average Dynamic Trading Strategy” is a fast moving average that delivers quick signals for trend changes and works really good as a long term trend indicator.
The Hull Moving Average indicator is able to answer the inherent problem making moving average quick to respond to current price action whilst retaining curve smoothness.
The Hull-moving-average (144) almost removes lag and tries to enhance smoothing in one clean swoop.
The HAMA_ indicator on the other hand uses a 2-color visualization (red and blue) to deliver sell and buy signals respectively.
Lastly on our chart is the Envelopes (20), that is designed after the moving averages and is also know a Moving Average Envelopes.
Considering our strategy, we did set the main moving average to 20 periods, while the upper and lower bands of the enveloped were let at 0.10% deviation.
Do find time to play with these values and see what best suits you.