Ehlers MESA Adaptive MA Analysis & Ehlers MESA Signals

Mesa Adaptive MAs was created by John Ehler

Originally used to trade commodities & stocks.

The MESA Adaptive average looks like two MAs. The difference is that the MESA moves in a staircase manner & not in a curved line like the MA. The example shown below shows this indicator drawn on a price chart.

Ehlers MESA Adaptive Moving Average

The MESA Adaptive MA is a trend following indicator that adapts to price action movement based on the rate of change of price as measured by Hilbert Transform Discriminator. This indicator will generate a signal when the two MAs cross one another. Trades should be executed in the direction of the MESA averages.

This method features a fast MA & a slow MA so that composite average rapidly follows behind the price changes and holds the average value until the next candle close occurs. This indicator is less prone to fake outs compared with the original Moving averages. This is because of its formula used to calculate the rate of change in relation to the price movement.