Middle-High-Low Moving Average Crosses for Trend Signals

Summary

The MHL Average combines two averages: a conventional price average and an average derived from the highest highs and lowest lows. The document describes comparing these lines and interpreting their crosses as indications of the current trend. It reports that the original approach uses a simple moving average by default, while this version defaults to an exponential moving average, and recommends experimenting with the parameters.

No precise formulas, parameter values, chart examples, or performance tests are supplied, so the description is not enough to reproduce or validate a particular implementation. A crossover can lag price changes and may produce repeated signals in sideways markets; the text does not address filtering, transaction costs, or risk controls. The indicator is presented as a way to infer trend from moving-average relationships, not as a tested standalone trading strategy.

Key ideas

• The indicator compares a regular price average with an average based on highest highs and lowest lows.
• Crosses between the two averages are treated as signals of the current trend.
• The described version uses an exponential average by default, whereas the source approach uses a simple average.
• The author recommends testing alternative parameter settings.
• The document gives no empirical results or complete formula for evaluating the indicator.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.