Guppy Multiple Moving Average (GMMA) – What It Is & How to Trade with It

Guppy Multiple Moving Average (GMMA) – What It Is & How to Trade with It

What is the Guppy Multiple Moving Average (GMMA)?

The Guppy Multiple Moving Average (GMMA) is a trend-following indicator developed by Daryl Guppy. It consists of two groups of Exponential Moving Averages (EMAs) to identify trend direction, strength, and potential reversals.

The GMMA formula consists of:

• Short-Term EMAs (3, 5, 8, 10, 12, 15) – Represent short-term traders and market sentiment.
• Long-Term EMAs (30, 35, 40, 45, 50, 60) – Represent institutional investors and long-term trend direction.

Key Features of Guppy Multiple Moving Average

• Distinguishes short-term and long-term trend participants.
• Provides early signals for trend continuation and reversal.
• Works well in both trending and ranging markets.

How to Use GMMA in Forex Trading

1. Trend Confirmation Strategy

GMMA helps traders confirm the strength of an ongoing trend:

• Bullish Trend: Short-term EMAs are above long-term EMAs and expanding.
• Bearish Trend: Short-term EMAs are below long-term EMAs and expanding.

2. Trend Reversal Strategy

A trend reversal is likely when short-term EMAs cross long-term EMAs:

• Buy Signal: When short-term EMAs cross above long-term EMAs.
• Sell Signal: When short-term EMAs cross below long-term EMAs.

3. GMMA Squeeze Strategy

When short-term and long-term EMAs contract, it signals low volatility before a potential breakout:

• Buy when: GMMA starts expanding upward after a squeeze.
• Sell when: GMMA starts expanding downward after a squeeze.

4. GMMA with Support & Resistance

Pairing GMMA with key support and resistance levels improves trade accuracy:

• Buy when: GMMA aligns with an upward breakout from support.
• Sell when: GMMA aligns with a downward breakout from resistance.

Pros and Cons of Using Guppy Multiple Moving Average

✅ Pros:

• Provides a clear visualization of trend strength.
• Useful for both trend-following and breakout strategies.
• Helps traders distinguish short-term vs. long-term market participants.

❌ Cons:

• Can lag in fast-moving markets.
• Requires confirmation from additional indicators for best results.

Final Thoughts

The Guppy Multiple Moving Average (GMMA) is a powerful trend-following tool that helps traders identify market trends, detect reversals, and gauge price momentum. When combined with support and resistance levels or volume indicators, GMMA enhances trade accuracy and decision-making.