Moving Averages (MA) facilitates technical analysis by smoothing the price data constantly updated after a set time interval. The second-generation traders, Alan Hull, developed a Moving Average. The fund manager, writer, I.T. expert, businessman, speaker wanted to create an MA that could respond to the current price activities and maintain the curve’s smoothness. Thus, the Hull Moving Average was created in 2005. This Moving Average claims to be more competitive and accommodating than the other MAs as it strives to eliminate lag while improving curve smoothness.

What is Hull Moving Average?

The Hull Moving Average (HMA) represents an extremely fast and smooth moving average developed by Alan Hull. HMA minimizes the lag of a traditional moving average while retaining the smoothness of the moving average line.

Please download the Hull Moving Average indicator for MT4.

Alan Hull moving average formula.

HMA= WMA(2*WMA(n/2) ? WMA(n)),sqrt(n))

To calculate the HMA moving average, it is necessary to do the next five steps:

1. Calculate the Weighted Moving Average for a period of time.
2. Reduce the time period into two halves by dividing it by 2. Now, use the value to calculate your second WMA.
3. Multiply your second WMA by two and subtract the first one from it. 
4. Find the square root of the new time period and take its integer value. 
5. The final integer that you found in the above step will be used to find the third WMA.

Alan Hull used the three Weighted Moving Averages (WMA) formula to develop his Moving Average. The WMAs are difficult to build, but they are more comprehensive and reliable than the Simple Moving Averages. Consequently, you can expect more conducive results from the Hull Moving Average.

The Best setting for hull moving average

The best setting for Hull moving average for long term trades is on 16 weeks long MA. For the hourly and daily charts, the best setting is the default 21 period long settings.

Many believe that considering a 13-week average would be better as it makes a quarter of the year, but Alan Hull explained the set-up of his Moving Average with the help of a 16-week long MA. Let’s take the same route.

When you are on your trading platform, you will see a column with a list of indicators. Scroll down and select the ‘Moving Averages’ option. This will open another box with various options. You will see a dropdown menu with options like Exponential, Simple, Wider, and more. Choose Hull. You will also get options to set the time period.

Once all this is done, you can add this indicator easily to your chart. You can edit the indicator by simply opening the indicator panel. You can change the settings, save everything, and close it. You can delete the indicator as well using the same panel.

If you wish to change the indicator’s colors, you can click on ‘L’ that could be found on the toolbar. You can do the same by typing the same letter on your keyboard. You will find several color options that you can select by clicking on the desired color patch.

Using the Hull Moving Average for Trading Signals

The Hull Moving Average creator recommends that traders use his creation for directional signals only as crossovers could face distortion due to lag. You should hold a long position when the Hull Average turns up and opt for a short position when it turns down. You can introduce a longer-term MA in the direction of a signal and then trade in the same direction.

How to trade using the Hull Moving Average

Hull Moving Average Strategy

Hull moving average strategy is based on the crossover technique applied on two moving averages to a chart: one longer and one shorter. The trader can enter into a position and exit from the position when a longer and shorter moving average cross.

For example, we can check a 13-period cross 52-period example or 16 and 32 cross example.

The green 32-weeks Hull MA is our source of trend directions in the above graph, while the trade signals are taken from 16-weeks Hull, MA. The latter is possible only when the 32-weeks slope is in the same direction.

In the above graphs, the green line means to go long, the red one means to go short, and the gray one gives exit signals. These colors can be changed. Read to know-how.

A pivot point is one of the many technical indicators used by traders. It tells us about the overall trend of the market over various time windows. At the core, the pivot point is the average that includes closing prices of the previous day and the market’s highs and lows. The next day, if you are trading higher than the pivot point, it is seen as an ongoing bullish sentiment. If you are trading below it, the market has bearish sentiment.

Typical pivot point strategy is based on the pivot point levels, analyzing previous day support and resistance. Traders need to analyze movement through these levels to speculate the trend and its direction.

In certain situations, complex pivot points may also occur. It usually happens when the pivot point formation takes several days.

Pivot Point Reversal Strategy

Pivot point reversal strategy is based on the first support level’s price action during the bullish trend and the first resistance level during the bearish trend. Traders follow the main trend and enter into the trade after reversal analyzing pivot point levels.

Pivot point reversal strategy steps are:

1. Determine pivot point levels
2. Determine the main trend
3. Pivot Point Reversal Strategy Trade execution
4. Calculate stop loss and target.

The pivot point focuses more on the closing price, associated with the bar that shows either the highest high or the lowest low. This is how the indicator behaves in the following situations:

When an uptrend has ended:

• The close lies below that day’s Low with the highest High.

When a downtrend has ended:

• The close lies above that day’s High with the lowest Low.

Determine the pivot point level

The standard Pivot point levels formula is:

Pivot point price level (PP) = (High + Low + Close) / 3

First resistance price level (R1) = (2 x PP) – Low

First support price level (S1) = (2 x PP) – High

Second resistance price level (R2) = PP + (High – Low)

Second support price level (S2) = PP – (High – Low)

Third resistance price level (R3) = High + 2(PP – Low)

Third support price level (S3) = Low – 2(High – PP)

Determine the main trend

The main trend can be determined using trendlines on the chart or SMA50, SMA100, or SMA200 moving average. A trader can decide how they will determine the main trend.

Pivot Point Reversal Strategy Trade execution

If the trend is bullish, traders wait for the price to touch the S1 level and bounce upside to enter into BUY trade.
If the trend is bearish, traders wait for the price to touch the R1 level and to bounce the downside to enter into SELL trade.

See an example of how to enter into BUY trade using Pivot Point Reversal Strategy Trade:

For BUY trade, the S2 support level and the target is R1 level.

For SELL trade, R2 is the support level, and the target is the S1 level.

Conclusion

Pivot point reversal is used widely by traders across the globe. Keep in mind that the signals produced by it are the most reliable after a trend has ended. Weak trends lead to weak signals. If you are not sure about this indicator, use it in conjunction with other indicators.

Forex is one of the most popular securities among traders and has the world’s largest trading market. There are many strategies that traders use, and one of them is the forex grid strategy based on several position sizing methods.

Forex grid trading represents a trading strategy where traders place BUY and SELL orders at set intervals around a set price, making profits from trend and range markets. Usually, traders generate several pending orders in the forex grid strategy. When traders trade in the bullish trend market, they set orders above-set prices and below set prices when they trade in bearish markets. To profit from range markets, traders buy orders below the set price and sell orders above-set prices.

One of these strategies that are used by forex traders is the Forex Grid trading strategy. 

Unfortunately, many fo grid forex trading strategies do not define stop loss and can produce huge losses.  Poor trading expert advisors offer grid forex trading strategy as a strategy where the stop loss is almost unlimited, where EA waits for mean reversion. This practice is wrong because risk management plans need to be clear, defined, and well analyzed. 

The Forex Grid trading strategy is one of the most self-sufficient trading methods. This automated system takes away the burden of manually opening or closing a position. This system acts as a visual aid for the traders as they can clearly see every movement. However, just because it is popular among traders, it does not guarantee success. You can benefit from any strategy only when you are aware of every character. To execute this system in the right manner, you have to know how the market works, the fundamentals that affect currency strength, and the market’s present dynamics. 

The Forex Grid system allows you to set it up to place trades automatically. By using it, even if the market conditions are volatile, you can come back to your investment, which is not possible with every other treading system. It saves you from making predictions about the market’s direction. All you need to know is when the market will make its next move, and your automated strategy will do the rest. Another reason for the popularity of the grid system is that it works efficiently in trending markets too. All you need to be aware of while trading in a trending market is the available margin.

What Does Forex Grid Trading System Means?

The forex grid trading system is a trading strategy where expert advisors or traders generate pending buy and sell orders above and below the entry position. Forex grid strategy is averaging down method type of system which is based on successive trades with the final goal to reduce drawdown and increase position exposure when position follow the primary trend.

Forex Grid trading is a system that depends on the natural movements of the market. Traders aspire to make profits by employing stop and sell orders. This is done on a leg (a set market distance), a fixed take-profit size, and no stop-loss. You do not have to concentrate too much on the variables affected by the market’s price movements. However, the downside of this system is that you have to deal with complex money management conditions. Since this system allows multiple trades to occur simultaneously, you also become more prone to margin errors.

Forex grid trading EA free download

Below you can download for free: forex grid trader Ea download
Forex grid trader EA download
This EA forex grid trading system is a simple system that Opens a grid of Buy Stops and Sells Stops at a specified distance from the price. It is semi-automated, and traders need to enter information as presented in Figure below:

How Does the Forex Grid Trading System Work?

Just like you need some time to adapt to any new trading tool or system, you will need some time to get comfortable with the Forex Grid. The first step of this system is to choose a starting point. You can choose the current price of your chosen currency pair.

In Figure below, we can see When traders trade in the bullish trend market, they set orders above-set prices:

The figure below shows that they set orders below-set prices when traders trade in the bearish trend market.

The figure below shows that traders buy orders below the set price and sell orders above-set prices to profit from range markets.

There are some numbers of Forex Grid system levels. Each level has a different order type, entry, and take-profit. You can refer to the table given below for better understanding. Now, you need to place three buy-stop orders and sell stop orders. Note that the former has to be above the current price while the latter has to be below the current price. You can even take the help of support and resistance levels, chart formations, and pivot charts to plot these points. These levels are not restricted. The size and the number of trades depend on you. 

Once you are done placing the orders, you can witness three possible scenarios. These are:

• The price may go either up or down. All the trades will get liquidated, and the price moves will hit your take-profits. You can go ahead and close your stop-orders.
• The system will open all the orders, and they will hit your take-profits.
• The price movement may open some positions but not hit the take-profits.

It is clear from the explanation that the last scenario is not a favorable one as you will suffer losses there. What happens in the final situation shows one of the biggest drawbacks of this system. It also highlights the fact that traders must always be prepared to face losses. 

Conclusion

Just like any other trading system, the Forex Grid system is not flawless as well. However, with some practice and patience, you can use this tool to maximize your overall profits.

As we know from previous posts, one of the best MACD indicators for MT4 is two lines and one histogram. This indicator visually better represents the change of the trend and enables traders to understand better the cycles of changing bullish and bearish trends. Traders can download MACD indicator MetaTrader 4 with two lines for free: 2 line MACD indicator for mt4 free download.

On the other side, the awesome oscillator is a histogram trading indicator that compares the current 5 bars with the 34 bars of the wider trends, based on the Awesome oscillator formula. The Awesome Oscillator is created to detect the bearish or bullish trend.–  Awesome oscillator mt4 download.

Using the combination of these two indicators, traders can use one common strategy – MACD and Awesome Oscillator Strategy.

MACD and Awesome Oscillator Strategy represents an entry position strategy where traders enter into a BUY position when a bullish MACD crossover is made. Both histograms are bullish (green color) or SELL position when a bearish MACD crossover is made. Both histograms are bearish (red color).

As we can see on the H1 chart for EURUSD, at the moment when MACD two lines make a bearish cross, we have a red arrow. At that moment, both histograms show red downside color. This simple strategy you can combine with other price action patterns, divergence, etc.

Stop loss and target can be created using daily ATR (from half to 1 Daily ATR for an example) or using FIb. Levels.

Two oscillators, such as MACD and awesome oscillator, usually can be used when traders want to create an additional filter, to avoid false breakout or overtrading.