There is no widely known or standardized channel indicator based specifically on the Hull Moving Average (HMA) like there is with the Keltner Channel (which uses the EMA and ATR). However, traders often custom-build Hull Moving Average channels by adapting the same principles used in Bollinger Bands or Keltner Channels.
Here’s how a Hull Moving Average Channel can be created:
Hull Moving Average Channel (Custom Indicator)
Basic Concept:
- Middle Line: Hull Moving Average (HMA)
- Upper Band: HMA + (Multiplier × Standard Deviation or ATR)
- Lower Band: HMA - (Multiplier × Standard Deviation or ATR)
Two Common Variants
1. HMA + ATR Channel
- Upper Band = HMA(period) + ATR(multiplier)
- Lower Band = HMA(period) - ATR(multiplier)
This mimics the logic of a Keltner Channel but replaces the EMA with the HMA.
2. HMA + Standard Deviation Channel
- Upper Band = HMA(period) + (StdDev(price, period) × Multiplier)
- Lower Band = HMA(period) - (StdDev(price, period) × Multiplier)
This is similar to Bollinger Bands but with HMA as the center line.
Why Use HMA?
- The Hull Moving Average is smoother and more responsive than EMA or SMA.
- Combining HMA with a volatility measure like ATR or Standard Deviation gives traders a dynamic envelope that adapts to market conditions.
Example in Pseudocode
python
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hma = hull_moving_average(close, period)
atr = average_true_range(period)
upper = hma + multiplier * atr
lower = hma - multiplier * atr
or
python
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hma = hull_moving_average(close, period)
std = standard_deviation(close, period)
upper = hma + multiplier * std
lower = hma - multiplier * std