GUPPY MULTIPLE MOVING AVERAGE ™
This innovative indicator, crafted by Daryl Guppy, is a game-changer in the trading world. You can dive deeper into its strategies in TREND TRADING. The Guppy MMA effectively captures the behavior patterns of traders and investors through two distinct groups of moving averages. It utilizes fractal repetition to pinpoint moments of agreement and disagreement, which often foreshadow significant trend shifts.
APPLICATION
This tool is essential for grasping the nature and character of market trends. It helps gauge the level and intensity of trading activity, as excessive trading can disrupt strong trends. By analyzing trends, you can select the most effective trading strategies, whether you're looking to break out, continue a trend, or apply it to both short and long-term investments.
TACTICS
- Join established trends at moments of price weakness.
- Jump into trends as they break into new highs.
- Trade breakouts by capitalizing on dips and rebounds.
- View downtrend rallies as opportunities rather than trend reversals.
- Be alert and recognize trend breaks as they unfold.
RULES
- The separation degree and nature in the long-term group indicate trend strength or weakness.
- The short-term group shows the nature of current trading activity.
- Separation between the two moving average groups reflects the trend's character.
- Compression signifies agreement on price and value.
- Simultaneous compression in both groups indicates a major reassessment of the stock and potential trend change.
- Always trade in the direction of the long-term moving average group.
- The relationships between the groups provide crucial insights into the trend's nature and character.
- Do not rely on this as a simple moving average crossover tool.
ADVANTAGES
- Facilitates effective trend environment analysis.
- Enhances the selection of appropriate trading tactics.
- Offers a better understanding of trend strength.
- Enables effective assessment of unusual price movements, including dips and spikes.
- Provides insights into trading activity and behavior.
DISADVANTAGES
- Not suitable for stocks lacking clear trends.
- May not be applicable to all trending stocks.
Do not use as a moving average crossover signal.
The indicator automatically colors intermediate values, keeping the number of parameters low and making it user-friendly. This version utilizes a double smoothed EMA, standing apart from regular moving averages.
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