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 shortterm traders. The number of days used in the set of shortterm 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 longterm investors. The longterm averages usually use periods of 30, 35, 40, 45, 50 or 60 days.
BREAKING DOWN 'Guppy Multiple Moving Average  GMMA'
The relationship between the two sets of moving averages is used by traders to determine if the outlook of shortterm traders aligns with investors who have a longerterm outlook.
Changing trends are identified when the two groups of moving averages intersect. A bullish trend is present when the shortterm moving averages are above the longterm averages. Conversely, a bearish trend occurs when the shortterm averages are below the longterm averages.
This term gets its name from Daryl Guppy, an Australian trader who is credited with its development.

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