Ehlers MESA Adaptive Moving Average Oil Trading Technical Analysis & Ehlers MESA Trading Signals

Mesa Adaptive Moving Averages was created 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 Moving Average. The example explained below shows this indicator drawn on a oil price chart.

Ehlers MESA Adaptive MA

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