Hull Moving Average Momentum

Entry Logic

• Entry trigger: The Hull Moving Average (HMA) changes color, indicating a change in momentum.
• Confirmation: A candle closes in the direction of the new momentum.
• Timeframe: 5-minute chart.
• Location context: The HMA is steeply sloped.
• Market condition: A strong, trending market.

Exit Logic

• Profit target: 2R or when the HMA changes color again.
• Scaling out: Not recommended.
• Trailing stop: Trail the stop on the other side of the HMA.
• Signal failure: Exit if the HMA changes color again.
• Opposite signal: Exit on a signal in the opposite direction.
• Time expiration: Exit by the end of the day.
• Momentum loss: Exit if the HMA flattens out.

Stop Loss Structure

• Hard stop: Below the low of the entry candle (for longs) or above the high (for shorts).
• Soft stop: A close on the wrong side of the HMA.
• Max dollar loss: $100 per trade.
• Max percent loss: 1% of account.
• Structural stop: Below the most recent swing low (for longs) or above the swing high (for shorts).

Risk Management Framework

• Risk per trade: 0.75% of account.
• Daily limit: 3 losing trades.
• Weekly limit: 4% drawdown.
• Max drawdown: 12%.
• R:R requirement: Minimum 1.5:1.

Position Sizing Model

• Sizing approach: Fixed fractional (0.75% of account).
• Volatility adjustment: Adjust size based on ATR.
• Conviction sizing: None.
• Scaling in: Not recommended.
• Scaling out: Not recommended.

Trade Filtering

• Market conditions: Avoid choppy, sideways markets.
• Setups: Only take trades when the HMA is steeply sloped.
• Instruments: Any liquid instrument.
• Time restrictions: None.
• Chop/news avoidance: Avoid trading around major news.

Context Framework

• Trend direction: The trend is confirmed by the slope of the HMA.
• VWAP relationship: Trade in the direction of VWAP.
• MA relationship: The HMA is above the 200 SMA for longs, and below for shorts.
• Range location: The trade is taken in the direction of the trend.
• Higher TF alignment: The 15-minute chart should confirm the trend.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1R move.
• Scale out: Not recommended.
• Add size: Not recommended.
• Fast vs slow moves: Let the trade run in a strong trend.

Time Rules

• Optimal window: Any time during a strong trend.
• Times to avoid: Choppy, non-trending periods.
• Session notes: Works well in all sessions.

Setup Classification

• A+ setup: A clear change in HMA color with a steep slope.
• A setup: A decent change in HMA color.
• B setup: A weak change in HMA color.
• C setup: Avoid.

Market Selection Criteria

• Instruments: Any liquid instrument.
• Volume: High.
• Volatility: Moderate to high.

Statistical Edge Metrics

• Win rate: 55%.
• Avg win: 1.5R.
• Avg loss: 1R.
• Profit factor: 1.2.
• Expectancy: 0.2R.

Failure Conditions

• The strategy fails in choppy, sideways markets.
• Avoid taking trades if the HMA is flat.

Psychological Rules

• Trust the HMA as a momentum indicator.
• Do not get shaken out by minor pullbacks.

Advanced Components

• Regime detection: Use the slope of the HMA to determine the trend strength.
• Filters: Only take trades when the slope is steep.
• Correlation: Be aware of market correlations.
• MTF alignment: Check the 15-minute chart for confirmation.

Location

• Strongest: In a strong, trending market.
• Weakest: In a choppy, sideways market.