Six short-term and six long-term EMAs stacked as two ribbons. Their compression, expansion, and crossings reveal the tug-of-war between short-term traders and long-term investors.
The Guppy Multiple Moving Average (GMMA) was devised by the Australian trader Daryl Guppy.
Where a single moving average shows only "the average drift of price," GMMA puts two crowds of a very different character on the screen at once.
The first is the short-term group — six EMAs of periods 3, 5, 8, 10, 12, and 15. It reflects the psychology of short-term traders, the speculators who trade the immediate move.
The second is the long-term group — six EMAs of periods 30, 35, 40, 45, 50, and 60. It reflects the psychology of long-term participants, the patient investors.
What GMMA shows is not price itself but the distance and behaviour of these two crowds. Are the ribbons compressed into something like a single line, or fanned out like an open hand? Does the short-term group cut through the long-term group, or get repelled by it? That is where the vitality of a trend, and the first hint of its turning, become visible.
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