If you have the opportunity to read the book " Trend Trading - A Seven-Step Approach to success " by Daryl Guppy, you will have a great deal of information about how to "read" the market. In his book Daryl show, among other things, how can we use a visual tool to measure the volatility and trend between Long and Short-term periods: The GMMA - Guppy Multiple Moving Averages .
Instead of using his original idea of having 12 Exponential Moving Averages in your chart - which could be very CPU-demanding if you have more than 1 chart opened in your computer - we decided to rewrite this idea and transform it into just a simple Filled-area but preserving all the calculations of the original idea. So, welcome to Guppy Zones .
HOW TO "READ" THIS INDICATOR
Daryl's book was based on Daily Charts, and the settings of his GMMA were also based on daily periods, so, for the Short-term periods he used: 3,5,8,10,12 and 15-day Exponential Moving Averages, and for the Long-term periods he used: 30, 35, 40, 45, 50 and 60-day EMAs. You can play around with the values on the settings of Guppy Zones, as it is very important to calibrate ANY kind of indicator to your needs ( Symbol , Timeframe, and Strategy ).
- Guppy Zones will show you areas of Dynamic Support and Resistances.
- Combining the reading between the Short and Long-term zones will provide you with more confidence about where the market is "going".
- Combining also the dynamic Support & Resistance zones with the Chart/traditional Support & Resistance zones you will be able to track and pinpoint trade targets and Stops.
SETTINGS
- Short-term Start period. Using the Classical setting = 3
- Short-term End period. Using the Classical Setting = 15
- Long-term Start period. Using the Classical setting = 30
- Long-term End period. Using the Classical setting = 60
- Smoothing Method. Classical = EMA (Exponential Moving Average)
- Price Type used for calculations. Classical = CLOSE price.
If you like this indicator, all I am asking is a little Review (not a Comment, but a REVIEW! )...
This will mean A LOT to me... And this way I can continue to give away Cool Stuff for Free...
With No Strings Attached! Ever!
Live Long and Prosper!
;)
