The Predictive Moving Average as a Color-Coded Trading Signal
Summary
The document briefly describes the Predictive Moving Average, attributing it to John Ehlers’s book Rocket Science for Traders. Its trading rule is based on the indicator’s color: buy while the line is green and sell while it is red. This is presented as one of Ehlers’s early leading indicators, but the document does not explain how the indicator is calculated or what makes it predictive.
No chart, parameter settings, market examples, test results, or risk controls are included. The color rule is therefore only a high-level signal description; it does not establish that the indicator anticipates price reliably or performs well after transaction costs. Readers would need the original method details and independent testing before treating it as a complete trading strategy.
Key ideas
- The Predictive Moving Average is attributed to John Ehlers’s trading work.
- The described rule is to buy when the indicator is green and sell when it is red.
- The source provides no calculation details, parameter choices, or market examples.
- No performance evidence or risk-management guidance is given.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.