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Ehlers MESA Adaptive Moving Average Stock Indices Technical Analysis and Ehlers MESA Stock Indices Signals

Mesa Adaptive Moving Averages was developed by John Ehlers

Originally used to trade commodities and stocks.

The MESA Adaptive average looks like two moving averages. The difference is that the MESA moves in a staircase manner and not in a curved line like the MA. The example illustrated below shows this indicator drawn on a stock indices price chart.

Mesa Adaptive Moving Averages

Ehlers MESA Adaptive MA

The MESA Adaptive Moving Average is a stock indices trend following indicator that adapts to stock index price action movement based on the rate of change of stock index price as measured by the Hilbert Transform Discriminator. This indices technical indicator will generate a trade 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 and a slow MA so that composite average rapidly follows behind the stock index price changes and holds the average value until the next candlestick close occurs. This indices technical indicator is less prone to whipsaws compared with the original Moving averages. This is because of its formula used to calculate the rate of change in relation to the stock index price movement.