Description

The short-term group are 3, 5, 8, 10, 12 and 15 day exponential moving averages. This is a proxy for the behaviour of short-term traders and speculators in the market. The long-term group is made up of 30, 35, 40, 45, 50 and 60 day exponential moving averages. This is a proxy for the long-term investors in the market.

The relationship within each of these groups tells us when there is agreement on value - when they are close together - and when there is disagreement on value - when they are well spaced apart.

When we combine multiple moving averages, a short-term group and a long-term group, we can see when the market has reached an agreement about the value of the stock. This can be used to understand the strength of the trend. Sustained activity of the short-term averages above the long-term group confirms a strong trend. The short-term group will fluctuate, but while the long-term group is in a steady band it suggests long-term support.

Signs of a weakening of the trend are when both groups of averages begin to narrow down and fluctuate more than is normal given their past recent activity. If both groups converge towards a crossover, then a trend reversal is signalled.
The relationship between the two groups tells the trader about the strength of the market action. A change in price direction that is well supported by both short and long-term investors signals a strong trading opportunity. The crossover of the two groups of moving averages is not as important as the relationship between them.
The use of Guppy Multiple Moving Average is also featured in Tutorials in Applied Technical Analysis from www.guppytraders.com

 

 To add a Guppy Multiple Moving Average to your chart, select the MA tool from the Guppy tool group, and click on the chart or indicator on which you wish to add the Guppy Multiple Moving Average. Market Analyst will then draw the Guppy Multiple Moving Average using the default settings.

 

Guppy Multiple Moving Average Actions & Properties

 
Actions

Save Settings As Default: Once settings have been changed on a tool (colour for example), you have the ability to save these settings as the default. This means the next time you apply the tool to a chart, the new settings will already be selected, without the need for you to adjust them manually.

Restore Default Settings: If you have altered the default settings of a tool, and wish to change them back to the program defaults, click this action.


Add Tool To Group: This action exists for all tools available in Market Analyst and allows you to add the selected tool to either a custom tool folder, or the tool bar (located along the top of the program window).

 

Properties

Calc Style: This option is used to set the type of moving average calculation for the Guppy Multiple Moving Average. The calculation options are Exponential, Simple, Weighted, Smoothed, or Modified. The default for Guppy Multiple Moving Average is Exponential.

Calc Using:  This option is used to determine which components of the data are used in calculating the moving averages. Click in this field to reveal a drop down arrow. Click on this arrow for the calculation options.

Group 1 Colour:  Sets the colour of the first group of Moving Averages.

Group 1 Width: Changes the width of goup 1

Group 2 Colour : Sets the colour of the second group of Moving Averages.

Group 2 Width: Changes the width of group 2

Width: Changes the width of plot0

Transperency:  Use this field to make the Guppy Multiple Moving Average tool transparent. The required level of transparency is achieved by sliding the scroll bar to the left or right.

Visible: This option allows you to visually turn the tool on and off the chart.