The Guppy Multiple Moving Average (MMA) indicator has been revamped to include a multi-timeframe option, making it even more versatile for traders. While it traditionally relies on Exponential Moving Averages (EMA), you now have the flexibility to choose your preferred average type.
GUPPY MULTIPLE MOVING AVERAGE ™
This indicator, developed by Daryl Guppy, provides deep insights into trader and investor behaviors using two distinct groups of averages. It employs fractal repetition to pinpoint areas of consensus and dissent that often precede significant trend reversals.
APPLICATION
The Guppy MMA helps traders grasp the essence of market trends and assess trading activity levels. Remember, excessive trading can destabilize robust trends. By analyzing trends effectively, you can select suitable strategies, whether you're looking to ride breakouts or continue with established trends. It’s adaptable for both short-term and long-term trading approaches.
TACTICS
- Join established trends when prices show weakness
- Enter established trends as they break new highs
- Trade breakouts using dips and rebounds
- View downtrend rallies as opportunities rather than breaks
- Recognize trend breaks as they unfold
RULES
- The degree of separation in the long-term group indicates trend strength or weakness.
- The separation in the short-term group reveals the nature of trading activity.
- Separation between the two groups defines the character of the trend.
- Compression signals agreement on price and value.
- When both groups compress simultaneously, it often signals a major reevaluation of stock and a potential trend shift.
- Always trade in the direction of the long-term average group.
- Relationships between the groups provide vital trend insights.
- Avoid using it as a moving average crossover tool.
ADVANTAGES
- Facilitates effective trend environment analysis.
- Enhances the selection of appropriate trading tactics.
- Provides a clearer understanding of trend strength.
- Helps evaluate unusual price movements like spikes and dips.
- Gives deeper insights into trading behavior.
DISADVANTAGES
- Not suitable for trendless stocks.
- May not apply to all trending stocks.
- Avoid using it as a moving average crossover signal.
One of the great features of the Guppy MMA indicator is its automatic coloring for intermediate values, keeping the number of parameters to a minimum and making it user-friendly.
Comments 0