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Ehlers MESA Adaptive Moving Average (MAMA and FAMA)

Excerpted from the article entitled "Mesa Adaptive Moving Averages" by John F. Ehlers in the Sept. 2001 edition of Technical Analysis of Stocks and Commodities magazine…

“The MESA Adaptive Moving Average (MAMA) adapts to price movement based on the rate of change of phase as measured by the Hilbert Transform Discriminator (Technical Analysis of Stocks and Commodities magazine, December 2000). This method features a fast attack average and a slow decay average so that composite average rapidly ratchets behind price changes and holds the average value until the next ratchet occurs.”

For a more detailed description of the MESA Adaptive Moving Average, please refer to the aforementioned article.

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Interpretation

Ehlers MESA Adaptive Moving Average can be used in place of traditional moving averages. Please refer to the "Moving Average" indicator for additional details.

Additionally, the crossing of the MAMA and FAMA lines can be used to generate Buy and Sell signals. When the MAMA crosses above the FAMA a buy signal is given. Alternatively, when the MAMA crosses below the FAMA a sell signal is given.

The materials presented on this website are solely for informational purposes and are not intended as investment or trading advice. Suggested reading materials are created by outside parties and do not necessarily reflect the opinions or representations of Capital Market Services LLC. Please refer to our risk disclosure page for more information.