Guppy multiple moving averages
TrendIntermediate
Daryl Guppy's multiple moving average splits a ribbon into a short group and a long group. The short group is a stand-in for traders, the long group for investors. A trend is readable when the two groups separate and each group is ordered from fast to slow. Compression of the ribbon is a warning that agreement has broken.
Not investment advice. Nothing here is a recommendation to buy or sell anything. Backtests and historical studies are not guarantees, and a rule that worked in one sample can fail in the next. Trading can lose money. Links are for education, not endorsements. Do your own research.
- Rules
- The usual trader group is EMA lengths 3, 5, 8, 10, 12, and 15. The investor group is 30, 35, 40, 45, 50, and 60. A long is considered when the trader group expands above a rising investor group. Exit when the trader group compresses back into the investor group or price closes through the slow ribbon. This is a state description, not a single cross of two lines.
- Where AI fits
- AI can score ribbon expansion, group separation, and ordering so the rule is not a visual judgment. It can also reject setups where the two groups are intermingled even if a fast average is rising. Those scores should be defined before looking at trade results.
- Markets
- Stocks and equity indexes. The idea was built for end-of-day equities.
- Timeframes
- Daily.
- Risks
- Twelve averages produce a chart that is easy to interpret after the fact. In a range the ribbons weave and the 'agreement' rule fires late or not at all. Copying the classic lengths onto a five-minute chart changes the strategy.