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I took 100 TRADES with FASTEST Moving Average Trading Strategy and this happened... HMA Strategy - YouTube
Channel: TRADING RUSH
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Is the Hull moving average better than a normal
moving average? What will be the win rate
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of the hull moving average trading strategy?
In this video I took 100 trades with the Hull
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moving average Trading Strategy, and here's
what happened. If you have been trading even
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for a little while, chances are you have probably
heard about the simple moving average and
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the exponential moving average. And if you
are a subscriber of the Trading Rush Channel,
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you already know the win rate of the Moving
Average Trading Strategy. On the Trading Rush
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Channel, we tested both, Simple moving average,
and exponential聽moving average 100 times,
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and both of them had a profitable win rate.
The Hull Moving Average is not exactly聽like
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the moving average聽that most traders are
used聽to. So will it make聽more money聽than
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the other moving average trading strategy?
Let's find out. If you still don't know about
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the profitable and simple moving average strategy
that actually made money, check out the EMA聽and
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SMA moving average strategy videos on the
Trading Rush Channel. And Subscribe and ring
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that notification bell, to see win rates聽of
more trading strategies that we test and have
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tested 100 times because you don't want to
risk your money on a strategy that doesn't
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even聽work.
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This is a 100-period simple moving average,
and this is a 100-period exponential moving
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average. Now we know that the exponential
moving average is different from the simple
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moving average because it gives more importance
to the latest candles. But visually they are
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not that different from each other. The simple
and exponential moving average are staying
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close to each other. But, if you add the same
100 period Hull moving average, even your
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dog can tell that the hull moving average
is calculating聽the average in a different
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way and is showing a different value on the
chart.
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The Hull Moving Average was created by Alan
Hull, and its main focus was to smooth out
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the moving average and reduce the lag. And
that's exactly聽what the Hull moving average
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does. On a trending chart, if you plot a 100
period SMA, EMA, and the Hull Moving average
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at the same time, you will notice that the
100 period Hull moving average will stay very
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close to the candles, while the Simple and
Exponential will stay far away.
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The Hull Moving Average is a moving average
so people are going to use it to find the
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direction of the trend. But the creator of
the HMA indicator Alan Hull does not recommend
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using the Hull as a crossover trading strategy.
In other words, it is not recommended to use
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the Hull Moving Average to generate crossover
signals. Which makes sense, because the whole
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point of making the HMA was to reduce the
lag and show the change in direction quickly
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as possible.
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In an uptrend, traders look for buying opportunities
when the Hull moving average starts to rise
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up, and when the HMA is falling, traders look
for short opportunities. Now let's be honest,
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you are not going to take trades only based
on a moving average. If you can trade only
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with a moving average, you can probably trade
without using a moving average like Hull.
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Because聽if you look closely, you will notice
that all Hull Moving Average is doing is sticking
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close to the price. And if you remove the
Hull Moving Average, you can still easily
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tell where the price is going.
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But what many of you wanted to find out was,
if the Hull Moving Average was Better than
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the Simple and Exponential Moving Average
Trading Strategies, and what will happen if
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we break the rules and use it as a crossover聽strategy.
What will be the win rate of the Hull Moving
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Average Strategy?
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The Hull Moving Average Crossover Trading
strategy is easy to understand and goes like
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this. When the 100 period Hull moving average
crosses above the 200-period simple moving
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average, it's a buy signal.聽聽 In the long
setup, the stop loss聽goes below the聽 200
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simple moving average. Similarly, when the
100 period Hull Moving Average crosses below
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the 200-period聽simple moving average, it's
a sell signal. In the short setup, the stop
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loss聽goes above the 200 period moving average.
Furthermore, the entry candle should not be
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on or between the simple and Hull moving average.
Simple as that.
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So I tested the Hull Moving Average Trading
Strategy 100 times, and here's what I found
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out.
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Number 1.聽 The best part about the HMA strategy
is the space between the Hull moving average
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and the Simple Moving Average. In a long setup,
since we are entering the trades when the
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price is above both Hull and Simple Moving
Average, the area between the Moving Averages
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is acting as the Cloud of the Ichimoku Cloud
Indicator. If you have watched the Ichimoku
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Cloud Trading Strategy Video on the Trading聽Rush
Channel, you already know that cloud is one
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of the best parts about the Ichimoku Cloud
Indicator and how it filters the slow trending
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and range markets. By using the 200 period
SMA with the 100 period Hull moving average,
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we are creating an area similar to the cloud
that filters some of the range markets on
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a chart.聽
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Number 2.聽If you take a look at the profit
graph on the Trading Rush App, you will notice
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that Hull Moving Average was making money
consistently at the beginning. This was when
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the price was making big moves after the entry
signals. But since the market moves sideways
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most of the time, a couple of trades were
lost in a row.聽 At one point, the Hull Moving
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Average Trading Strategy lost 12 trades in
a row. Now, remember, I tested this strategy
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with a 1.5 to 1 reward risk ratio to compare
it with other trading strategies we have tested
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on the Trading Rush Channel. But while taking
100 trades with it, I noticed that many winning
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trades had the potential to make more than
2 times more profit than the risk. In other
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words, while using the Hull Moving Average
Trading Strategy, it can sometimes be better
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to trail the stop loss聽to catch the big move,
and to get a high reward risk ratio. I have
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already talked about some of the best trailing
stop loss indicators on the Trading Rush Channel,
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check it out to learn more.
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So after taking 100 trades with the Hull Moving
Average Trading Strategy, I got an approximate
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win rate聽of 42 percent with a 1.5 to 1 reward
risk ratio. Since we were booking more profit
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than the risk, the HMA trading strategy still
made money in the Trading Rush App, but this
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profit was not as good as some other trading
strategies we have tested on the Trading Rush
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Channel. It won 4 trades in a row but lost
12 trades in a row. The Hull Moving Average
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Crossover strategy is not that bad, it is
just that your chances of making good money
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with it are low. But let's see where it ranks
up against other trading strategies we have
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tested so far, by giving the Hull Moving Average
Trading Strategy a TR score.
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If you have watched the Golden Cross Trading
Strategy Video or are already familiar with
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it, you probably realized that the Hull moving
average crossover strategy is very similar
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to the Golden Cross Strategy. And surprisingly,
both strategies聽got the same win rate after
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testing 100 times. Since the Hull moving average
got the same win rate as the Golden Cross,
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it gets a 4.2 out of 10 in the Win Rate category,
just like the Golden Cross Strategy.
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It gets a 7.5 in the easy-to-use category.
And gets a 4 out of 10 in the Reliability
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Category. The profit graph of the Hull Moving
Average Strategy was slightly better than
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the profit graph of the Golden Cross Strategy
and less noisy when compared with the profit
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graphs of some other strategies that also
got a win rate聽of around 42 percent. So in
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the consistent profits category, it gets a
4 out of 10. And in the quality of the Trades
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Category, it gets a 4.5 out of 10.
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So the Hull Moving Average trading strategy
gets a TR Score聽of 24.2 out of 50. And on
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the Trading Rush Website, it ranks 17th from
the top, below the RSI Supertrend Trading
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Strategy, and above the Stochastic Strategy.
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And that's all. Like the video, if you liked
it. Subscribe and ring that notification bell,
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to see win rates of more trading strategies
that we tested 100 times. If you want me to
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test your trading strategy聽100 times, mention
it in the comments below. After all, you don't
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want to risk your money on a strategy that
has a low win rate聽in the first place. Support
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Trading Rush on Patreon, and see In-Depth
Trade Analysis and Trade Opportunity Signals.
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Thanks a lot for watching.
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