Ehler MESA Adaptive MA Technical Analysis & Ehlers MESA Trading Signals

Mesa Adaptive MAs was developed 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 Moving Average. The example explained and illustrated below shows this indicator drawn on a trading price chart.

Ehler MESA Adaptive Moving Average

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

This method features a fast Moving Average and a slow Moving Average so that composite average rapidly follows behind the price changes and holds the average value until the next candlestick close occurs. This 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 price movement.