Guppy Multiple Moving Average - GMMA

AAA

DEFINITION of 'Guppy Multiple Moving Average - GMMA'

An indicator used in technical analysis to identify changing trends. The technique consists of combining two groups of moving averages with differing time periods.

One set of moving averages in the Guppy multiple moving average (GMMA) has a relatively brief time frame and is used to determine the activity of short-term traders. The number of days used in the set of short-term averages is usually 3, 5, 8, 10, 12 or 15.

The other group of averages is created with extended time periods and is used to gauge the activity of long-term investors. The long-term averages usually use periods of 30, 35, 40, 45, 50 or 60 days.

INVESTOPEDIA EXPLAINS 'Guppy Multiple Moving Average - GMMA'

The relationship between the two sets of moving averages is used by traders to determine if the outlook of short-term traders aligns with investors who have a longer-term outlook.

Changing trends are identified when the two groups of moving averages intersect. A bullish trend is present when the short-term moving averages are above the long-term averages. Conversely, a bearish trend occurs when the short-term averages are below the long-term averages.

This term gets its name from Daryl Guppy, an Australian trader who is credited with its development.

RELATED TERMS
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth ...
  2. Golden Cross

    A crossover involving a security's short-term moving average ...
  3. Death Cross

    A crossover resulting from a security's long-term moving average ...
  4. Crossover

    The point on a stock chart when a security and an indicator intersect. ...
  5. Exponential Moving Average - EMA

    A type of moving average that is similar to a simple moving average, ...
  6. Moving Average Convergence Divergence ...

    A trend-following momentum indicator that shows the relationship ...
RELATED FAQS
  1. Why is the Moving Average Ribbon strategy important for traders and analysts?

    Moving average ribbons plot a large number of moving averages onto a price chart, forming an extreme version of multiple ... Read Full Answer >>
  2. How do I use Guppy Multiple Moving Average (GMMA) to create a forex trading strategy?

    Forex trading is notably more short-term focused and volatile than markets for other securities, and any applied technical ... Read Full Answer >>
  3. Why is the Guppy Multiple Moving Average (GMMA) important for traders and analysts?

    Traders look to time changes in stocks or securities to collect a series of profits. Investors operate with more of a buy ... Read Full Answer >>
  4. What are the best technical indicators to complement the Guppy Multiple Moving Average ...

    The Guppy multiple moving average (GMMA) indicator is composed of a unique set of moving average trendlines. These trendlines ... Read Full Answer >>
  5. What is the Guppy Multiple Moving Average (GMMA) formula and how is it calculated?

    Named after Australian trader Daryl Guppy, the Guppy multiple moving average (GMMA) indicator is a technical tool built on ... Read Full Answer >>
  6. What is a common strategy traders implement when using the Guppy Multiple Moving ...

    Daryl Guppy was the first trader to differentiate between the market activity of traders versus investors through short-term ... Read Full Answer >>
Related Articles
  1. Active Trading Fundamentals

    Simple Moving Averages Make Trends Stand Out

    The moving average is easy to calculate and, once plotted on a chart, is a powerful visual trend-spotting tool.
  2. Technical Indicators

    A Primer On The MACD

    Learn to trade in the direction of short-term momentum.
  3. Forex Education

    Moving Average Explosions

    Find out how you can profit from this short squeeze strategy.
  4. Forex Education

    Moving Average Envelopes: Refining A Popular Trading Tool

    Traders can benefit from experimenting with envelopes, which help spot trends after they develop.
  5. Active Trading

    Moving Averages

    Discover one of the most reliable indicators in technical analysis and learn how to incorporate it into your trading routine.
  6. Trading Strategies

    Basics Of Technical Analysis

    Learn how chartists analyze the price movements of the market. We'll introduce you to the most important concepts in this approach.
  7. Chart Advisor

    Consider Buying These Uptrending Stocks

    Recent pullbacks in these uptrending stocks present an opportunity to get long for another possible rally.
  8. Technical Indicators

    Use Volume And Emotion To Tackle Topping Patterns

    Selling short in a topping pattern offers an advantageous reward-to-risk profile, but it can be hard to find good entry prices.
  9. Trading Strategies

    How to Do the Fundamental And Technical Combo Trade

    Fundamental and technical analyses should be viewed as complementary rather than competing practices. When combined, these two methods can greatly strengthen your game.
  10. Mutual Funds & ETFs

    How To Apply Technical Indicators To Mutual Funds

    Mutual funds do not readily lend themselves to technical analysis, but investors can use common indicators to evaluate mutual funds as easily as stocks.

You May Also Like

Hot Definitions
  1. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  2. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  3. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  4. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  5. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  6. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
Trading Center