Guppy Multiple Moving Average (GMMA)

Name Type Prerequisite Use Cases
Guppy Multiple MA (GMMA) Trend/Regime EMA Spotting trend breakouts and exhaustion.

Definition

The Guppy Multiple Moving Average (GMMA) was developed by Daryl Guppy. It involves two groups of exponential moving averages (EMAs): a short-term group and a long-term group. It is designed to capture the interaction between traders (short-term) and investors (long-term).

Mathematical Equation

  • Short-term EMAs: 3, 5, 8, 10, 12, 15 periods.

  • Long-term EMAs: 30, 35, 40, 45, 50, 60 periods.

Special cases

  • Maximum possible value: Unbounded
  • Minimum possible value: 0
  • Behavior: Follows the price using a ribbon of multiple short-term and long-term EMAs.

Visualization

Guppy Multiple Moving Average

Trading Significance

  1. Compression: When the EMAs in a group compress (come close together), it indicates agreement on price and potential for a breakout.

  2. Crossover: When the short-term group crosses the long-term group, it signals a major trend change.

  3. Separation: Wide separation between the groups indicates a strong trend.