Ehlers MESA Adaptive MA Analysis & Ehlers MESA Signals

Mesa Adaptive MAs was created by John Ehler

Originally used to trade commodities & stocks.

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

Ehlers MESA Adaptive Moving Average

The MESA Adaptive MA is a price trend following indicator that adapts to price action movement based on the rate of change of price as gauged by the 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 as 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 & analyzed with the original Moving averages. This is because of the formula which is used in calculating the rate of change in relation to the price movement.

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