trading cryptocurrency market using hull moving average indicator

trading cryptocurrency market using hull moving average indicator

By quintomudigo | Teacher forex school | 12 Feb 2020


Hull Moving average indicator is a lagging trend following indicator.

As a lagging trend following indicator, Hull Moving Average indicator was created by Alan Hull with the main objective of eliminating lag thus ensuring smoothness curve movement. Since Hull Moving Average is a trend following indicator, it therefore follows that it is used to enable trader to know the direction of the market, that is whether the market is moving upwards or moving downwards. Because of this, it is therefore based on support and resistance.

 

Hull Moving average indicator is therefore calculated using the following formula;

Hull Moving average = integer(squareroot(period) ) WMA{2* integer(period/2)WMA(price)-period WMA(PRICE)}

Since Hull moving average is a lagging trend following indicator, it therefore follows that when the hull moving average indicator is moving upwards,the market will also be trending upwards while when the hull moving average indicator is trending downwards,the market will also be in a downwards trend. This can further be explained on bullish and bearish crypto market as follows;

 

1. Hull Moving Average bullish cryptocurrency market.

Based on support and resistance, When the price in the market is moving downwards, hull moving average will also be trending downwards . When the price falls below the lowest low point of the hull moving average when the two are moving downwards, an upward reversal market will take place since a support point will take place. This will signal the cryptocurrency trader to purchase a given amount of cryptocurrency with their USDT balance. The trader can either place a market buy order which will be processed immediately or they can place a limit buy order which will be processed when the market reaches a limit buy order price. This is indicated as from below;

351665157-46b7d5136f838259eff003ed57cdae792ed3cddc76fa725b230bfc78be1f7a37.png

The above is the TRX market against USDT. Two points are being indicated. There is point A and point B. Point A is the Hull Moving Average while point B is the support point. At point B, the price in the market has fallen below the lowest low point of hull moving average thus an indication of support point over there. This signals the cryptocurrency trader to purchase a given amount of TRX with their USDT balance over there since an upward reversal movement is starting to take place. The trader can either place a market buy order or a limit buy order.The market order is instantly processed while the limit order is processed when the market reaches the limit order price. When the order is being processed,the account of the trader will start increasing in value in terms of USDT. 

2. Hull Moving Average bearish cryptocurrency market.

Based on support and resistance, When the price in the market is moving upwards, hull moving average will also be trending upwards . When the price rises above the highest high point of the hull moving average when the two are moving upwards, a downward reversal market will take place since a resistance point will take place. This will signal the cryptocurrency trader to sell a given amount of cryptocurrency which he had previously purchased and is currently holding. The trader can either place a market sell order which will be processed immediately or they can place a limit sell order which will be processed when the market reaches a limit sell order price. This is indicated as from below;

351665157-7d1c5b47831b717931e3444ff458f8feec8a0e0788b8e8f569e1af4e18754b03.png

 

The above is the TRX market against USDT. Two points are being indicated. There is point A and point B. Point A is the Hull Moving Average while point B is the resistance point. At point B, the price in the market has risen above the highest high point of hull moving average thus an indication of resistance point over there. This signals the cryptocurrency trader to sell a given amount of TRX which he had previously purchased and is currently holding over there since a downward reversal movement is starting to take place. The trader can either place a market sell order or a limit sell order.The market order is instantly processed while the limit order is processed when the market reaches the limit order price. When the order is being processed,the account of the trader will have increased in value in terms of USDT.

 

cryptocurrency market is a highly volatile market. As a cryptocurrency trader,whenever you place a buy order,always make sure to apply risk management so that whenever your buy order goes against you, your account do not depreciate so much in value.

 

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quintomudigo
quintomudigo

Trader, Blockchain Technologist and Contentpreneur. Also founder and CEO @ Teacher Forex School.


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