Active Trader Trading System Labs: 2007

The Hull Moving Average (HMA) was created by trader, businessman, mathematician, and IT expert Alan Hull. It is a combination of weighted moving averages (WMA) designed to be more responsive to current price fluctuations while still smoothing prices.

In this test the HMA is used in a strategy featured in a previous Trading System Lab — the "Trend with Pattern Entry (TPE) system" from the April 2003 issue of Active Trader. This system combines a trend-following rule with a simple pullback pattern — a long entry occurs after a brief pullback in an uptrend.