Ehler MESA Adaptive Moving Average Indices Technical Analysis and Ehlers MESA Indices Trading 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 explained and illustrated below shows this indicator drawn on a indices price chart.

Ehlers MESA Adaptive MA

The MESA Adaptive Moving Average is a indices trend following indicator that adapts to stock indices price action movement based on the rate of change of stock indices price as measured by the Hilbert Transform Discriminator. This stock indices 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 Moving Average and a slow Moving Average so that composite average rapidly follows behind the stock indices price changes and holds the average value until the next candlestick close occurs. This stock indices 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 indices price movement.