Although the original Guppy template/strategy uses exponential moving averages (EMA), this MT5 Guppy indicator allows the trader to use any type of moving averages on any timeframe. Customization of colors is possible in the indi settings.

Guppy in a nutshell

Shows how traders and investors act based on two sets of averages. Finds patterns of consensus and conflict that come before big shifts in the trend.

Helps to know the type and quality of the trend. Measures how much and how often trading happens. Too much trading can weaken strong trends. Trend analysis helps to choose the right trading strategies such as breakout, trend continuation etc. Works for both long and short trading. Works for intraday trading. Also good for long term investment analysis.

Guppy strategy

• Enter trends when the price is low
• Enter trends when the price reaches new highs
• Trade breakouts using dips and rebounds in rallies
• Trade rallies in downtrends as rallies not trend changes
• Spot trend changes as they happen

Basic rules

• Trend strength and weakness depend on how far apart the long term group is
• Trading activity depends on how far apart the short term group is
• Trend character depends on how far apart the two groups are
• Compression means agreement on price and value
• Compression of both groups means big re-evaluation of stock and possible trend change
• Trade with the long term group of averages
• The groups tell you about the type and quality of the trend
• Do not use as a crossover tool

Pros

• Helps to analyse the trend situation
• Helps to choose the right trading actions
• Helps to know how strong the trend is
• Helps to judge unusual price movements, such as dips and spikes
• Helps to understand trading activity and behavior

Cons

• Not effectively applied to trend less stocks
• Cannot be applied to all trending stocks
• Do not use as a moving average crossover signal