Guppy's Multi-Moving Average (GMMA)

Here's a cherry-picked example (I hate it when people do this - it shows a false view of how easy trading is!)

Here's a real live example. The red line marks the first time all five conditions have been met, but it doesn't look like a dominant or powerful break. I'm hoping the current move is more decisive.

Here's another live trade using the GMMA strategy. When I noticed it today I saw we had a decent pullback and figured a trade was in order, even though it wasn't as soon after the signal point as I would like. I used a buy stop order. Hopefully it's got far enough to go to get me away from the danger zone and then I can just trail the stop until it's done.

I've been trying to figure out how to avoid entering a trade when price is going nowhere or price action is messy. What does price do before a long trend takes off? It's probably no surprise, but when there is a period of consolidation, when all the lines are close together seems to be the answer. Here are some examples. Please comment!

The basic idea is if you could add together all the spaces between the lines, the smaller the total, the better. This is what it looks like. Right in the centre of that screenshot, everything is as close to everything else as it could possibly be.

And here is the full chart where that example came from.

So it seems it's a good idea to wait for price to go into a consolidation phase, when price is going sideways and then try to catch the explosive breakout. That seems to be how to get in on a high probability trade and avoid poor setups. In theory anyway! We all know how difficult it is when done live.

Here are some more examples of a period of sideways movement (in the first two it is mostly off-screen to the left because I wanted to show the size of the breakout trend!). Then there is the "pinch" when the lines are very tightly packed. After that comes the breakout.



And here we have a long consolidation period - when will the breakout happen? So the next question I need to work on is how to catch the breakouts.

So if I can be patient and simply wait for these elements, avoiding all others, I *should* make lots of high probability trades:

1. Sideways movement (easily shown by the tight lines of the GMMA plus 200 EMA);
2. A "pinch";
3. A breakout.

Next year. We need to stop trading now because nothing will be happening for a while. We can't sail our yacht when the wind isn't blowing. But I am excited to try this in the new year.

Like it, will check and come back with result.

This trade did not use the "pinch" concept. It has been going back and forth for almost two days. The GMMA lines are still very much in my favour, so I'm sticking with it.

But have a look at where a pinch did happen (very helpfully on the same chart as my current trade). All five conditions I mentioned previously were also met and once that had happened price dropped away fairly soon after. If you look closely at the sideways period before the pinch I don't think there was any time when a pinch was in place AND all five conditions for a trade were also in place. So in this case it was not difficult to identify the breakout.

It would have been a great trade. A useful lesson. Wait for the A+ setups.

Greetings everyone, I wish you a great year of trading. It's not yet time to resume trading - probably Monday 10th is the day.

In the meanwhile I have been looking at how the GMMA pinch works - the anatomy of it - and it really does seem to provide high probability trades. And if one adds in the five necessary conditions as listed on this image, it often protects us from entering when the breakout isn't ripe yet.


But it's always possible to find successful examples of almost any strategy, so I went looking for cases where the "perfect" anatomy exists [EDIT] and the trade would have failed. There are very few.

On the idea of trailing the stop along the 60 EMA - this works only when the trade is trending well and the EMAs are fairly steep. If the trade isn't moving well then price will more easily touch or cross the 60 EMA. So use this with discretion. A volatility-linked stop like Guppy's Count-back line (CBL), or trailing it down the swing points of the lower time-frame might be better in this case.

And at the beginning of a trade when one is living more in hope than with certainty, it's a challenge to know what to do with the stop - either move it to B/E as soon as possible (and probably get stopped out with no loss), or keep it well out of harm's way for a decent amount of time and only then start trailing it. Waiting for price to reach 2R seems like a good strategy.


I'm certainly looking forward to getting to use this approach soon. Then this theorising might all come crashing down!

i have been using this system for many years now with descent success. i dont trade currency. i trade nifty and bank nifty on hourly timeframe for swing trades. i trail my stoploss on ema 10 low for long trades and ema 10 high for short trades. i also use rsi 6 and 12 both should be above or below 50 for going long or short. always wait for candle to close for entry and exit. this way i am able to limit my losses to minimum and if the trend is good the profits are fairly good. also i ususlly trade 2 lots. my first target for one lot is equal to my initial stoploss. once my first target is acheived i move stoploss of second lot to entry price.

also i have CBL indicator coded for alerts . i dont use it now. i like ema 10 high/low for trailing . but for anyone interested , it might help.

the rsi and few other indicators which i tried for better entries and/or exits are posted in other threads but they are all there in my profile.

Hi Rajesh, thanks for your posts. Could you perhaps post a screenshot of one of your charts showing what your GMMA setup looks like? I also noticed that the default settings on the CBL indicator you kindly attached is set to 2 countback steps, not the usual 3. Could you explain why?

Looking forward to learning more from you.

The countback steps is 3. but i find using 10 ema high low better than CBL

I started trading GUPPY MMA method after reading this thread itself. over a period of time i made few modifications to suit my trading personality. especially the entry and exits. By profession i am a cancer surgeon, so cant spend too much time on screen. i cannot use EA as no broker in india allow thading via MT4 platform.
Here is my chart and templete with all indicators.

i dont use the short term MMAs. instead i use channelnel of 10 ema high/low. as long as all candles are outside the channel, the trend is very strong.

Very interesting, Rajesh, I had never thought of creating a channel by using the High and Low moving average options. In an earlier time I would be tempted to jump into this and use it, but changing systems when we find one isn't working for us is bad practice, a symptom of a poor trading mindset, so I won't! The truth is that trading success is inside our minds and the holy grail is between our ears. So any system will work if we have those right.

I have been using an EMA crossover system for some time now and had some very successful times trading pullbacks to the EMAs with it. The GMMA approach is in the same territory, but is a richer visual guide to price behaviour, so I am keen to explore it more fully. There are two main GMMA options that I want to gain experience with. One is the "pinch" that I have been posting about recently and the other is trading pullbacks during an established trend. Both are well-supported by the GMMA system - all of that lies ahead, can't wait!

Here's to an excellent 2022. A boring one for trading, hopefully. Anyone care to guess why that's important?

Aaah I have been reading throught the thread over the holidays and maybe interpreted it differently regarding the pinch points. I took it that the initial pinch expanding is the signal and a second pinch/expand is the confirmation of entry. I have popped it on a couple of your charts :

Have I been intepreting things incorrectly or is this just a slightly "safer" method?

Hi Snowdonred, the secondary pinch you identified is not my kind of pinch :-). I would call that a pullback to the MAs and it is a good place to enter a trade. My definition is based on calculating the total or aggregate value of the gaps between all of the EMAs including the 200 EMA AND current price, ideally. The lower the score, the tighter all those EMAs are to each other. I'm sure there's an app that can do that, but it's simple to eyeball it. After that we wait for the five conditions I listed to be fulfilled and then go for it. My research (noting that historical data is always much easier to trade) suggests that a setup consisting of a consolidation period where even the 200 EMA is horizontal and close to the other EMAs, followed by a pinch, followed by an expansion almost always leads to a strong breakout.

Like this ...

You might identify other "pinches" in the sideways section prior to the breakout, but the five conditions I list mostly prevent an entry until the real breakout happens. Subsequent pullbacks (your secondary pinch) would be great places to add to the trade or re-enter after being stopped out.

Gotcha, I saw your earlier reference to adding the distance between the lines, I previously threw togetheran EA that tried to take signals from a similar idea but found it was getting a lot of false entry signals caused by a sudden spike/retrace in the price forcing the MA lines to contract, especially with the lower length MAs.