Guppy's Multi-Moving Average (GMMA)

Heck I couldn't live without them Blue Guppies!

Me, too.

Looking at GMMA short in MT4 in the 1hr chart a buy (reversal) shows up in the 1 pm bar, and in the 4hr chart a buy is in the 9 am bar, much before the news announcement at 2:15 pm. The T3 also showed buys in these charts much earlier than the news.

Is it psychic?

Pyschic fishes.. On this forum, now I've seen everything!!

Seriously though, I do love the Guppies..

Follow the trend but beware of major news reversals

http://www.aqualandpetsplus.com/Livebe65.jpg

What my Guppy indicator looked like during a news report.. grrr...

Really?

This is what my illegitimate son of a guppy [fantail] looked like. At least shortly thereafter.

btw. you may notice i flipped at what I think will be a top based on another indicator. Right PipR?

very interesting

Guppy's multiple moving average numbers vs Alan Hulls:

Guppy's numbers and Hull's number differ..

Guppy uses: 3,5,8,10,12,15 short, 30,35,40,45,50,60 long

Hull uses: 3,5,7,9,11,13 short, 21,24,27,30,33,36 long

So I've attached Hull's numbers here..

Hull also uses: 2,4,6,8,10,12 short; 19,22,25,28,31,34 long (better results); I have created a rainbow chart using ema 2-34... works well for me...

i read some of the GMMA docs and im confused. you look for the short term MMAs to start to converge and cross the long term, but it can just as well bounce off the long term

so how is this different than a regular crossover?

here is the chart for EURUSD. can someone expand on what the GMMA is telling us?

here is the pic and an exerpt from the article. look at decision point A and B.

Both buy signals are created by the convergence of the MAs. A fails and B is good. Just like any other indicator, not perfect. However how is this different than a regular crossover technique, except for the fact that you are using a lot of MAs instead of two or three?

He talks about ignoring a classic buy signal on March 10 in later articles using GMMA. Anyone have more info on this or the article?

Hi there clam61. When i viewed the DVD by Guppy on his GMMA model i came away with a much better understanding of the MMAs. ( Someone please correct me on this next statement if i preceived it wrongly ) Guppy does not use the GMMAs in a standard crossover model, rather he typicaly waits for all lines to cross and confirm the new trend and wait for a convergence of the lines and bounce away from the LTmas in the direction of the new trend for confirmation...such as what happened in late April on the chart you posted on CSL Daily as the blue STmas bounced off the LTmas confirming the new trend that began when all STmas crossed down through all LTmas in mid January.

This aligns with how i've used them, and i would have seen the reaction of the STmas away, and down, from the LTmas at decision point A as another opportunity to go short in the direction of the new trend which began in late January. I would have also run the fibos out and seen if this area coincided with logical retracement areas and if it made sence that what i was seeing might be a stall/rest of price before resuming current trend.

Cheers,
Thom

Hi Accrete,

Thank you for sharing your views with us. If I understand it correctly, the way you described to use GMMA is a trend follower, and usually profitable for long term trend (because you usually have to wait for days if not weeks to confirm a new trend), right?

A problem I have about the indicators/systems based on MAs is, I can't pinpoint when I should join the trend -- yes sometimes I jump in and can be right by luck, but that's just not good enough. When the market is ranging, all these indicators/systems seem to have a high probability to fail. And when the market is turning into trending, you usually have been burnt badly so you will always be waiting for some means of confirmation, and that sometimes will cost you a trend if it doesn't last long. So again, it seems still depending on luck -- how long the trend you just jumped in will last?

I understand that these indicators/systems can tell us the direction of the trend pretty well in a trending market. But is there a way to find out when the trend begins and lasts? Or eveybody just jump in and pray it's going to last (sounds like gambling to me). Or there are some statistics shown that majority of the trends will last for days in this pair and in weeks in that pair so you guys just have the experience/feel to know when to trade.

Just some confusions from a newbie, any lights shed on this will be very much appreciated!

aha

Hi again : )

In general my take on Guppy's model from what i've seen/read is that in a situation like the above CSL Daily from the later part of March through the first week in May when the ST in blue had gone up in to the LT red one would wait for a decision...either a clear bounce back down (as it eventualy did a couple weeks later) or break through and above as a change in trend. Once the two groups representing short term vs investors is all jumbled up this would raise a yellow caution flag that the market is range bound. And to switch over to some sort of range trading model such as a box-trade or classic breakout trade.

~Thom

I came back to "edit" my above post but see that options is not and option at this point so here goes. Thought you might be interested in my set up on the GMMAs. This screen shot i took yesterday gives a good view of what is going on:

Take care,
Thom

http://accrete.com/fx-posts/FiboGMMAsOnEurUsd.gif

but simply put, how can oyu differentiate between A and B?

If I understand this correctly it seems to me that both A and B are sell signals, not buy.

Someone correct me if I'm wrong, but I believe the general priciple is to trade in the direction of the longer term MMA group, but to wait for the shorter term MMA group to converge/bunch-up before entering.

In this case, selling short at point A would have been profitable, but at point B it would probably be a small loss (depending on money management). Then in late April or early May as the shorter group peels away and separates from the longer group, this would be another short entry signal (which would have been profitable there).

I think that the rules are roughly:
1. [Trend] Wait for the LT group to fan-out and start moving smothly up or down: This determined the trend and the direction we will trade.

2. [Early Signal] Once the LT group is fanned-out, wait for the ST group to bunch up. The ST group could squeeze in either away from the LT group (still separated)...or it might squeeze in near the LT group (maybe even touching the LT group). What to do next requires a final confirmation signal.

3. [Confirmation]
(A) If the early signal (ST group squeezing in on itself) occurs away from the LT group, i.e. still separated from it, then we are looking for a confirmation signal that price will continue in the direction of the LT group. This signal could be the ST group starting to fan-out again...or maybe the signal could be by price itself, like a candlestick/bar moving in the direction of the LT group. If no such confirmation comes I suppose it's better not to trade; wait for another ST squeeze.
(B) If the early signal (ST squeeze) occurs near or even touchin the LT group then we are looking for one of two confirmation signals. Either the ST group fans out again in the direction of the LT group (this would probably look like the ST group is bouncing off the LT group)...or we could be seeing the beginning of a new trend in the opposite direction, in which case we are looking for the ST group to cross over the LT group and then for both groups to start fanning out in the new direction.

Can any experts confirm or correct these rules?

In assessing the GMMA relationships in breakout trades four relationships are considered. The first two apply to the longer term group of averages, and the second group to the short-term group of averages.

1.Compression: Early in the breakout the long-tem group compresses.

2.Direction:Compression indicates agreement. The direction of the compression provides clues to the future development of the trend.

3.Collapse:It takes a lot of effort to break out of an existing trend. The rallies in a downtrend and the dips in an uptrend are short lived, and are expected to collapse or bounce. The nature of the collapse or bounce in the short-term group provides clues to the strength of the trader activity.

4.Rapid bounce or collapse:A fast bounce/collapse and recovery in the short-term group confirms increased trading activity.

Also Guppy suggests to use a straight edge trend line to confirm the trend change.

Thx
DL