Guppy Moving Average System

[Leth]

Multiple Moving Averages
by Daryl Guppy

The Multiple Moving Average indicator was devised by Daryl Guppy and consists of five short-term and five long-term exponential moving averages. The short-term MA's are 3, 5, 8, 10, 12 and 15 days and the long-term MA's are 30, 35, 40, 45, 50 and 60 days but these can be varied according to the Time Frame being traded. The short-term group represent traders' view of the market and the long-term group represent investors.

Trading Signals

Convergence and Divergence:

-When moving averages within a group are parallel and close together, the group are largely in agreement;
-When the moving averages widen, this signals divergent views within the group;
-When moving averages converge, this is a sign that the group view is changing.

Trend strength:

-Parallel long-term MAs signal long-term investor support and a strong trend; and
-Short-term MAs tend to bounce off the long-term moving average group.

Trend weakness:

-Both groups of MAs converge and fluctuate more than usual.

Trend start:

-A change in price direction accompanied by expanding MAs in both groups.

-Short-term reversals:

The short-term group diverge after crossing over before again converging.
Crossovers are not as important as spacing between the MAs in each group.

Setup

Select the pre-set file titled [Multiple Moving Averages] from the File menu.
Use the Indicator Panel to adjust the moving averages to suit your needs.

Example

Australian Stock Exchange Limited (ASX) is shown with multiple moving averages.

asx%20multiple%20mas.png