Guppy Multiple Moving Average

Jun 17, 2015 No Comments by

Guppy Multiple Moving Average

The Guppy Multiple Moving Average (GMMA) indicator tool is based on the relationships between groups of moving averages. Each group of averages in the GMMA provides insight into the behavior of the two dominant groups in the market – traders and investors. The indicator allows the trader to understand the market relationships shown in the chart and so select the most appropriate trading methodology and the best tools. The GMMA is designed to understand the nature of trend activity on an end of day, or intraday basis. The inferred activity of traders is tracked by using a group of short term moving averages. The traders always lead the change in trend. Their buying pushes up prices in anticipation of a trend change. Their activity is shown by a 3, 5, 8, 10, 12 and 15 day group of exponentially calculated moving averages. The trend survives only if other buyers also come into the market. Strong trends are supported by long term investors. The investor takes more time to recognize the change in a trend but he always follows the lead set by traders. We track the investors’ inferred activity by using a group of long term moving averages. This group is 30, 35, 40, 45, 50 and 60 day exponentially calculated moving averages.

 

Effective analysis of the trend environment.

1)  Better understanding of trend strength

2)  Effective analysis of unusual price movements, such as dips and spikes

Entry after trend break-Indicates that the trader can purchase stocks on this level.

Price weakness mid-trend entry-Indicates that the trader can make another entry in the uptrend.

Entry after trend break- This signifies that the investor here can short sell.

 

Watch the video tutorial

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