Ehlers MESA Adaptive MA Trading Analysis and Ehlers MESA Trading Signals
Mesa Adaptive MAs was developed by John Ehler
Originally used to trade commodities and stocks.
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 Moving Average. The example shown & described below displays this indicator drawn on a price chart.
Ehlers MESA Adaptive Moving Average
The MESA Adaptive Moving Average is a market trend following indicator that adapts to price action movement based on the rate of change of price as measured by the Hilbert Transform Discriminator. This 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 & a slow MA so that composite average rapidly follows behind the price changes & holds the average value until the next candlestick close occurs. This indicator is less prone to whipsaw fakeouts 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.
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