Guppy Multiple Moving Averages for Comparing Short- and Long-Term Trends

Summary

The document explains the Guppy multiple moving average indicator as two groups of exponential moving averages. One group uses periods 3, 5, 8, 10, 12, and 15 to represent short-term trading activity; the other uses periods 30, 35, 40, 45, 50, and 60 to represent longer-term investor behavior. The author says the groups were designed for daily charts but can also be applied on shorter timeframes. Users may change the average type, lookback periods, and price input.

The method interprets the spacing and alignment of the groups as a way to assess whether short- and long-term participants agree. The author suggests that tightly grouped, parallel averages may precede a large price move, but provides no systematic test or evidence for that claim. The indicator is presented as a tool for trend context and possible entry timing, not as a standalone trading rule. Its suggested signal interpretation remains subjective and may not transfer across instruments or timeframes.

Key ideas

• The Guppy indicator compares two groups of moving averages to represent short- and long-term market participants.
• The short-term group uses six averages from 3 to 15 periods, while the longer-term group uses six from 30 to 60.
• Alignment and separation between groups are used to interpret agreement or divergence between trader horizons.
• The suggested link between tightly grouped averages and an upcoming large move is not supported by quantitative tests in the document.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.