Ehler MESA Adaptive Moving Average - how it works and what the signals mean.

Mesa Adaptive Moving Averages was created by John Ehler

Originally used to trade commodities and stocks.

MESA Adaptive average acts like two Moving Averages. The difference is that the MESA goes up or down in steps, not in a smooth curve like the MA. The picture below shows how this technical indicator looks on a price chart.

Mesa Adaptive Moving Averages: Ehler's MESA Adaptive MA Explained

Ehler MESA Adaptive Moving Average

The MESA Adaptive Moving Average is a tool that follows market trends. It changes to fit the price action based on how quickly the trading price changes, using the Hilbert Transform Discriminator. This tool makes a signal when the two Moving Averages go across each other. Trading should be done based on the direction of the MESA averages.

This method uses a Moving Average that reacts quickly and one that reacts slowly, so the combined average closely tracks price changes and maintains its value until the next candle closes. This indicator is less likely to give false signals when compared to regular Moving averages. This is because of how the formula calculates the rate of change in relation to how the price moves.

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Ehler MESA Adaptive Moving Average - how it works and what the signals mean.