Guppy Long and Short Indicator for MT4

May 23, 2022

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Introduction to the Guppy Long and Short Indicator

Moving average crossover strategies are some of the simplest trend reversal trading strategies that many traders use. The Guppy Multiple Moving Average was developed by Daryl Guppy, an Australian Trader, to help traders identify potential trend reversals using multiple moving average crossovers.

What is the Guppy Long and Short Indicator?

The Guppy Long and Short Indicator, also known as the Guppy Multiple Moving Average (GMMA) Indicator, is a trend following technical indicator which indicates trend direction using moving average lines.

This indicator is composed of two sets of moving average lines, one set represents the shorter trend while the other set represents the longer trend. Each set is composed of six moving average lines. The Guppy Short Indicator is composed of the 3, 5, 8, 10, 12, and 15 period Exponential Moving Average (EMA) lines. The Guppy Long Indicator is composed of the 30, 35, 40, 45, 50, and 60 period EMA lines.

How the Guppy Long and Short Indicator Works?

The Guppy Long and Short Indicator is composed of two separate technical indicators. One is the Guppy Long Indicator and the other is the Guppy Short Indicator. Each indicator plots six moving average lines. The preset period lengths are already mentioned above. The Guppy Short Indicator plots its moving average lines in orange, while the Guppy Long Indicator plots its moving average lines in lime. These two indicators can also compute its moving average lines using different methods as selected by the trader.

How to use the Guppy Long and Short Indicator for MT4

Each of the two indicators have its own modifiable variables which can be found within its indicator settings. However, the variables and options of the two indicators are identical. The only difference is in the preset period lengths.

“Period…” allows users to modify the number of periods the indicator would use to calculate each moving average line.

“Shift…” allows users to shift each moving average line forward or back.

“Method” allows users to select what type of moving average line the indicators would plot.

“Applied Price” allows users to select the price point on each bar which the indicator would use to calculate for its lines.

Buy Trade Setup

When to Enter?

The orange Guppy lines should be above the lime Guppy lines. Open a buy order if the faster moving average lines would cross above the slower moving average lines.

When to Exit?

Close the trade as soon as the faster moving average lines would start to cross below the slower moving average lines.

Sell Trade Setup

When to Enter?

The orange Guppy lines should be below the lime Guppy lines. Open a sell order if the faster moving average lines would cross below the slower moving average lines.

When to Exit?

Close the trade as soon as the faster moving average lines would start to cross above the slower moving average lines.

Conclusion

The Guppy Long and Short Indicator can be a very effective tool when trading trend following strategies, including trend reversal and trend continuations. It has the potential to produce huge yields whenever the market would start to trend. However, it also has the tendency to produce false trade signals when used in a ranging market.