Overview of the MESA91 Add-on

Designed and programmed by John F. Ehlers, MESA91 is a collection of dynamically tuned indicators that derive their adjustments from the high resolution Maximum Entropy Spectral Analysis (MESA) measurement of the spectral content of market data.  A low lag, accurate measurement of the dominant cycle is extracted from the spectrum.  A simplified model of the market consists of the combination of a trend and a cycle.  Since the cycle period is known, it can be removed from the data to expose the underlying trend.  The market is best traded using oscillator-type indicators when it is in a cycle mode and is best traded using moving average-type indicators when it is in a trend mode.  The MESA91 collection of indicators are not only dynamically adjusted by the dominant cycle, but advanced Digital Signal Processing (DSP) techniques are used to produce low lag and non-causal anticipatory signals. 

Compared to the MESA9 indicators, all of the indicators in MESA91 have a modification to the cycle length measurement that accounts for the fractal nature of the cycle amplitude (longer cycles have a greater swing).  All of the indicators have a new algorithm that extracts the Dominant Cycle from the spectrum.  Basically this is a Center-of-Gravity averaging rather than merely selecting the period with the highest amplitude.  This approach gives a smoother Dominant Cycle and therefore better looking adaptive indicators that use it.

In addition, the MESA91 indicators allow you to fine tune the dominant cycle for each instrument.   The indicators include parameters for Lowest Period (LP) and Highest Period (HP).   The objective of adding the LP and HP parameters is to ideally limit the range between them to an octave, thereby eliminating the possibility of harmonic distortions.  The particular values of LP and HP might change from symbol to symbol and may be optimized.  HP must be larger than LP.

The MESA91 indicators were developed and programmed by John Ehlers, a world renowned expert in applying scientific principles and DSP technology to the art of technical trading.  Ward Systems Group will provide technical support for the indicator examples and use of the indicators with NeuroShell Trader.  Questions concerning theory and methodology should be addressed to John Ehlers through his website at www.mesasoftware.com .