Guppy Multiple Moving Average (GMMA)
Candlefocus EditorWhen the short-term group of MAs is above the longer-term group, it often indicates that a new uptrend in asset price may be emerging, while when the short-term group falls below the longer-term group of MAs, a price downtrend may be starting. This provides traders with useful insight into when they should enter trades and when they should stay on the sidelines.
Traders and investors look to trade the breakouts of GMMA crossovers generating potential buy and sell signals. When the short-term MAs cross over the long-term MAs, traders may view this as an opportunity to enter a trade in the direction of the crossover. It is important to note that this is not an exact signal and traders should also monitor the movements of volume and other technical indicators like the relative strength index (RSI) before entering a trade.
The GMMA is a versatile technical indicator as it provides insight into both short-term and long-term trading signals. It is a useful tool for identifying changes in price trends, breakouts and trading opportunities. However, it is important to remember that technical indicators should only be used as one of many signals to base investment decisions on.