Combines Hull Moving Average with ATR-derived volatility bands to create dynamic support and resistance levels. Useful for identifying trade entry/exit points, setting stop-loss levels, and gauging trend strength.
Works in SQX 137 and higher.
Hull Moving Average (HMA) ATR Bands is a technical analysis indicator that combines the concepts of Hull Moving Average (HMA) and Average True Range (ATR) to create dynamic support and resistance levels, or “bands”, around the HMA line. This indicator helps traders to gauge the volatility and price action around the HMA, providing additional insights for potential trade setups.
Here’s a brief explanation of the two components:
1. Hull Moving Average (HMA): The Hull Moving Average, developed by Alan Hull, is a fast and smooth moving average designed to reduce lag and improve responsiveness compared to traditional moving averages. The HMA is calculated by taking the weighted moving average (WMA) of the midpoint (half of the period) and subtracting the WMA of the full period. Then, a WMA of the square root of the period is taken from the result. This calculation reduces lag and provides a more responsive moving average line.
2. Average True Range (ATR): ATR is a volatility indicator developed by J. Welles Wilder Jr. that measures the degree of price movement or volatility within a specific period. ATR is calculated by taking an average of the true ranges, which are the greatest of the following: the current high minus the current low, the absolute value of the current high minus the previous close, or the absolute value of the current low minus the previous close.
To create HMA ATR Bands, you would first calculate the HMA line and then add or subtract a multiple of the ATR from the HMA. This multiple is typically a user-defined parameter that can be adjusted according to the desired sensitivity of the bands. The result is an upper and lower band that represents a range around the HMA, which can be used to identify potential support and resistance levels or to gauge the strength of price moves relative to the HMA.
HMA ATR Bands can be used in various ways, such as identifying potential entry and exit points, setting stop-loss and take-profit levels, and evaluating the strength of trends. Keep in mind, though, that like any technical indicator, HMA ATR Bands should be used in conjunction with other tools and analysis techniques to improve trading decisions.
The indicator has these parameters
• ComputedFrom – Type of price series
• Period – Lookback Period of HMA
• Multiplication – Multiplication of the ATR from the HMA
Indicator is implemented for: MT4/MT5/Tradestation/ Multicharts
You can easily do your conditions in Custom blocks. More information you can find here:
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