Daryl introduced GMMA in his book, Trend Trading.
The Guppy is a trend-following technique composed of 12 EMAs (or exponential moving averages).
The multiple lines of the Guppy help traders see the strength or weakness in a trend better than if only using one (or two) EMAs.
They separated the 12 EMAs into two groups:
Each group contains six MAs.
In the chart above, color differentiates the two groups of EMA.
The “short-term” group is blue, while the “long-term” group is red.
The trend is determined by the long-term EMAs, the short-term EMAs gives signals.
You would enter a trade when a trend reversal occurs, which is indicated when one group crosses over the other group.
When the short-term group crosses ABOVE, the longer-term group, BUY.
When the short-term group crosses BELOW, the longer-term group, SELL.
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