Daryl guppy multiple moving average indicator

  • Daryl guppy multiple moving average indicators

    Guppy multiple moving average indicators is a custom indicator that is a combination of moving averages. This is an indicator with a unique appearance with colorful and stripes forming like a rainbow color.

    The appearance does seem to fill the chart, but this is precisely what makes the Guppy multiple moving average attractive.

    Especially, traders who fully rely on technical analysis using the toolbox indicator, Guppy multiple moving averages are very attractive to buy and sell confirmation signals.

    What is clear is that this indicator can be used for all timeframes, so you can adjust it to your trading style.

    Curious about the Guppy multiple moving averages, in this article, you will find the answer.

    What is the Guppy Multiple Moving Average Indicator?

    Guppy multiple moving average or abbreviated as GMMA is a custom indicator to assess the trend, introduced in 1997 in Trading Tactics. This is a book by Daryl Guppy.

    The Guppy multiple moving average indicators is a technical indicator that consists of two groups of MA.

    The first group of MAs is composed of six EMAs with periods 3, 5, 8, 10, 12, and 15 which can give us clues to the direction and strength of the short-term trends that speculators are used to playing.

    The second group indicator is composed of six other EMAs with periods 30, 35, 40, 45, 50, and 60 on the daily timeframe.

    This timeframe is usually used to measure the direction and strength of long-term trends in which smart investors are playing.

    The two EMA groups can be used to measure "Matching or not" groups of speculators and investors.

    Understanding these two groups of indicators has the potential to broaden a trader's understanding of the current trend. Or identify times when the trend will change.

    Daryl Guppy founder Guppy Multiple Moving Average

    Daryl Guppy is a trading expert from Australia who introduced and popularized the GMMA indicator. He is the founder and Director of Guppytraders.com Pty Ltd.

    He is also an active trader who trades various futures products.

    He has written several books including the popular ones are "The 36 Strategies of the Chinese for Financial Traders, Trading Tactics, Bear Trading, Chart Trading, Trading Asian Shares"

    In early 2008 he also published the book "Snapshot Trading" (also in Chinese). His book, entitled Trend Trading, became a best-seller published by Beijing.

    With the Metastock platform, Omnitrader, and various other charting programs, Daryl Guppy is an expert who developed the Guppy Multiple Moving Average indicator.

    Daryl Guppy is an honorary member of the Australian Government Shareholders and Investors Advisory Council.

    He regularly delivers comments and analysis on CNBC's program, CNBC Asia Squawk Box.

    He is also a writer in several magazine editors, such as Technical Analysis of Stocks and Commodities, Sydney Futures Exchange Magazine, Working Money, Bridge Trader, Your Trading Edge, Active Trader, Singapore's Smart Investor, The Edge, Australia's Shares, and Personal Investment, and Personal Money in Malaysia.

    Guppy Multiple Moving Average explained

    Guppy Multiple Moving Average uses two groups of Moving averages.

    Group one is for the short term, the second group is for the long term.

    The short term group uses a set of moving averages 3, 5, 8, 10, 12, or 15.

    While the long term group uses a collection of moving averages 30, 35, 40, 45, 50, or 60.

    Is the period used in each MA group irreversible? Yes, you can. The moving average used in the Guppy Short term or Guppy Long term group can be reset again for the period and the applied price according to the respective trading strategy.

    Thus, it can also be said that the level of the indicator's sensitivity to trend changes can be set according to the trader's plans.

    Although this GMMA consists of two groups of moving averages, this indicator cannot be combined with MA. This is because both have the same function as trend indicators. However, an important point that deserves to be underdog from using this indicator is its ability to know the strength and movement of a trend, as well as its effectiveness in measuring trend changes.

    How to use Guppy Multiple Moving Average?

    It was explained that the Guppy Multiple Moving Average is an indicator to identify trend changes or measure the strength of the current trend. How to?

    Measuring Trend Strength

    This can be seen from the degree of separation of the lines of each moving average.

    If we see a wide separation of MA lines, then the prevailing trend is strong, and vice versa if the separation of MA lines is narrow it means that the trend is weak.

    Chart by tradingview

    Determining a Trend Reversal

    For this purpose, we look at the convergence and the crossovers of the respective groups of long and short term moving averages which represent trend reversals.

    If the short-term group crosses from the bottom up of the long-term MA group, there has been an uptrend reversal, and vice versa for a downtrend.

    This indicator can indeed stand alone, but to complete it as a signal filter, you can combine it with other indicators.

    For example, with the Relative Strength Index (RSI) to look at oversold and overbought areas so that it can identify reversals or look at various chart patterns to determine entry or exit points after the GMMA cross.

    The point is about how to read the signal indication shown by the movement of the GMMA indicator on the chart, there are two main keys to pay attention to:

    • When the two MA groups are parallel and close to each other, it means investors and speculators have "matched" a deal, so a strong trend is likely to start shortly

    • But when the MA starts to break away, it gives a signal that the view is starting to split into one group. If the MA moves centralized in one direction, it will give a signal that the group's view is starting to change.

    Chart by tradingview

    While the strength of a trend can be identified in two ways:

    • Guppy long term parallel indicates long-term investors support the ongoing trend, so the trend tends to be strong. Conversely, if Guppy Short term tends to bounce from the Guppy Long term.

    • The weakening of the trend can be recognized if the two MA groups converge and fluctuate higher than usual.

    The guppy indicates price action during consolidation

    The guppy can also identify when there is a consolidation trend, this can be seen when the two groups intersect and crisscross between the two groups MA Long term and Ma short term.

    This condition indicates that the market is not changing much, the fundamental news is not so significant because the price moves.

    After a long period of consolidation, there will usually be a change in a new trend that is stronger. The guppy signals the consolidation has ended.

    Chart by tradingview

    Guppy triangle breakout 

    Guppy is also used to breakout strategies by combining it with a symmetrical triangle pattern.

    You need to find a triangle pattern on the chart to identify the strength of the weakening trend.

    To the point where the triangle has converged, this is an indication that the strength of the trend has weakened, and usually, a breakout will occur after this pattern ends.

    The guppy indicator can provide a breakout signal from the intersection of the EMA, depending on the up or down direction of the intersection to determine a down or up breakout.

    In a triangle pattern there is a descending triangle, ascending triangle and symmetric triangle, in the Guppy strategy this indicator only focuses on the symmetry pattern, because it will be easier to catch the next breakout.

    Chart by tradingview

    Tactics

    The following are some tactics or philosophy of using the Guppy indicator:

    • Combine price trends with price lows.

    • Combine price trends with the highest price points.

    • Trade when prices are rising and falling so fast.

    • Trade when prices are rising and falling so fast when there is a trend change.

    Advantages

    • Can measure trends in general.

    • Knowing the strength of a trend.

    • Effective in measuring price changes when rising or falling.

    Drawbacks

    Can not be combined with a moving average because the function is the same as to measure trends.

    The guppy indicator is included in the lagging indicator, it takes past price data, and gives a signal when a trend has formed, especially if it is waiting for the intersection between MA groups. It gives a late signal if you wait for a cross between groups.

    GMMA indicator mt4 download

    The GMMA indicator is a custom indicator, so you won't find it on the MT4 platform by default. You have to download it and install it on your platform manually.

    To find the download link you can find the MQL5 market and also the forex factory guppy indicator.

    Below is a link where this indicator is used by traders in the Forexfactory forum thread

    Guppy indicator download MQL5

    Guppy multiple moving average templates

    This is a basic guppy template, you just copy files to the template folder in the MQL4 data folder on the platform. The image below is displayed from the Guppy indicator template.

    If you have the interest to use the Guppy template, here you can download the file.

    Bottom line

    The Guppy Multiple Moving Average (GMMA) indicators will complement the toolbox you've learned. This can be useful for finding trading momentum, you can find the times of trend reversals, measure the strength of the trend, so it can help in making trading decisions.

    Although the Guppy indicator is a group of moving averages, there are differences between the two. Guppy uses EMA groups which can provide more detail of a given signal when compared to using only one or two moving averages.

    Its use is very flexible, it can be used to analyze various kinds of financial markets, from the stock market, forex, cryptocurrency, and can also work on all timeframes.

    However, the developer is advised to use it on a daily time frame.

    If you are curious about the performance of GMMA, you can try a test with a demo account, but when it's ready, you can trade now.