Plain-English definition
HMA combines weighted moving averages at different lengths, then smooths the result using the square root of the selected length.
What it measures
Smoothed direction and rate of change in price.
Formula
HMA(n) = WMA(2 × WMA(price, n/2) − WMA(price, n), √n).
How to read it
Slope and price relationship are commonly used as trend context. Color changes are implementation choices, not a separate calculation.
Common signals
- Slope change
- Price cross
- Fast/slow HMA alignment
- Pullback toward the average
Best market conditions
Clean directional markets where a responsive filter is useful.
Weak market conditions
Choppy ranges, where a fast HMA can repeatedly flip direction.
Default settings
Length 55 is common in public scripts, though 9, 16, and 21 also appear frequently.
Alternative settings
Short lengths emphasize responsiveness; long lengths emphasize regime. Test nearby values and bar-close behavior.
Repainting and confirmation
The base HMA is fixed after close. Apparent historical changes often come from higher-timeframe lookahead, forming candles, or custom coloring logic.
Common mistakes
- Assuming smooth means predictive
- Using a very fast length in chop
- Ignoring higher-timeframe implementation
- Treating every color change as a trade
Example use
Use HMA slope as directional permission and a separately tested trigger for timing, both evaluated on closed candles.
Strategy ideas worth testing
- Slope as a regime filter
- Pullback continuation
- HMA plus STC
- ATR-filtered direction changes
Complementary indicators
Summary verdict
Responsive and visually clear, but still a moving average. Regime filtering determines whether its speed helps or hurts.
Frequently asked questions
Does HMA eliminate lag?+
No. It reduces lag relative to some averages but remains price-derived.
Why can an HMA backtest change?+
Check forming candles, higher-timeframe requests, lookahead, and script changes.
Does base HMA repaint?+
Not after candle close.