Highlights

MQTrader Education Series

Author: MQTrader Jesse   |   Latest post: Wed, 25 Jul 2018, 11:30 AM

 

MQ Trader Strategy – Guppy MMA

Author:   |    Publish date:


What is Guppy Multiple Moving Average (Guppy MMA)?

The Guppy Multiple Moving Average (Guppy MMA) is a technical indicator that is able to identify the changes in trends by combining two groups of simple moving averages (SMA) with different time periods.

Calculation for simple moving average:

Simple moving average (SMA) is the mean number of a given set of values.

Table 1: The price of a stock throughout the past 10 days.

Day

1

2

3

4

5

6

7

8

9

10

Price

16

10

8

15

12

8

9

11

7

14

There are 2 sets of moving averages used in Guppy MMA:

  1. Short-term: The first set of moving averages has a relatively brief time frame for assessing short-term trading activity. The number of days that is commonly used is 3, 5,8,10 and 12.
  2. Long-term: The second set of moving averages is computed based on longer time period for analyzing long-term investor activity. The number of days that is usually used is 30, 35, 40, 45 and 50.

The relationship between both sets of moving averages allow traders to determine their relationship with each other by identifying if the short-term trading outlook aligns with the long-term investment outlook.

Source: MQ Trader Stock Analysis System

How to identify Buy and Sell signals with Guppy MMA?

Breakout

Buy signal

Sell signal

a

Crossover

All of the short-term Guppy MMAs cross all of the long-term Guppy MMAs from bottom.

All of the short-term Guppy MMAs cross all of the long-term Guppy MMAs from the top.

b

Trend Direction

  • All Guppy MMA lines are separated by a uniform distance.
  • All lines are in upwards movement.
  • All Guppy MMA lines are separated by a uniform distance.
  • All lines are in downwards movement.

c

Trend Reversal

  • If 5 long-term Guppy MMAs start to flatten, long-term trend becomes vulnerable.
  • If short-term Guppy MMAs start to separate further apart from each other, the market is likely to experience changes in its existing trend.

d

Sharp Move Identification

  • When all 10 lines move very near to each other, there is a very high chance for a sharp move to take place.

For a clearer image of the statement above, different types of breakout are demonstrated in the Figure (a) & (b), (c) and (d) as shown below by using Supermax Guppy MMA Hourly Chart.

 

Figure 1: Guppy MMA hourly chart of (a) & (b) Crossover and trend direction demonstration, (c) Trend reversal demonstration and (d) Sharp move identification demonstration.

Advantages of Guppy MMA

  • The GMMA indicators enable traders to have a better understanding on the trend strength
  • Better analysis of trading activity and the trend environment can be determined
  • Effective evaluation of abnormal price movements including dips and spikes
  • Improves the selection of the proper trading strategies

Disadvantages of Guppy MMA

  • Not applicable for trendless stocks
  • Lagging effect

Conclusion

Guppy MMA trading strategy is a very useful tool to identify the trend strength of a stock. It can be used in conjunction with other technical indicators such as EMA 5 Crossover, MACD and RSI, ADX Crossover and OBV Breakout to maximize their odds of success.

Community Feedback

We encourage traders to try out and evaluate the MQ Trader system and provide us feedback on the features you like to see in the system. We have received many positive feedbacks so far, and we are currently compiling and reviewing them for possible inclusion into the next release of the system.

We would like to develop this system based on community feedback to cater for community needs. Thanks to all those who have provided valuable feedback to us. Keep those feedbacks coming in!

Disclaimer

This article does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties in the Internet. We may or may not hold position in the stock covered, or initiate new position in the stock within the next 7 days.

Join us now!

MQ Trader stock analysis system uses Artificial Intelligence (AI), various technical indicators and quantitative data to generate accurate trading signals without the interference of human's emotions and bias against any particular stock. It comprises trading strategies which are very popular among fund managers for analysing stocks. 

MQ Trader stock analysis system is SPONSORED for MQ Trader members. To use this amazing tool, you can sign up via MQ Trader Sign Up!

Contact us

Please do not hesitate to contact us if you have any enquiry:

Email: admin@mqtrader.com 
 

 

Share this
Labels: SUPERMX

Related Stocks

Chart Stock Name Last Change Volume 
SUPERMX 1.40 0.00 (0.00%) 169,400 

  4 people like this.
 
chengsk67 Good write up to intro Guppy MMA. Thanks! Hope to see more technical analysis cases on klse stocks.
27/07/2018 3:06 PM


 

154  117  403  1589 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 DBE 0.035+0.005 
 DYNACIA 0.09+0.005 
 DYNACIA-PA 0.05+0.005 
 HSI-H8F 0.065-0.06 
 XDL 0.110.00 
 SAPNRG 0.265+0.005 
 ARMADA 0.485+0.02 
 AT 0.050.00 
 EKOVEST 0.825+0.015 
 HSI-C7J 0.12+0.035 

FEATURED POSTS

1. Leveraged & Inverse ETF CMS
Partners & Brokers