Guppy Multiple Moving Average (GMMA)

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Definition of 'Guppy Multiple Moving Average (GMMA)'

The Guppy Multiple Moving Average (GMMA) is a technical indicator that is used to identify trends and potential reversals in the price of a security. It is a type of moving average that is calculated using a weighted average of multiple simple moving averages. The weights are assigned based on the time period of the moving averages, with the shortest-term moving average having the highest weight.

The GMMA is typically plotted as a series of lines on a chart, with each line representing a different moving average. The lines are typically colored differently to make them easier to distinguish.

The GMMA can be used to identify potential trading opportunities by looking for divergences between the GMMA and the price of the security. A divergence occurs when the GMMA and the price of the security move in opposite directions. A bullish divergence occurs when the price of the security makes a lower low while the GMMA makes a higher high. This indicates that the trend may be about to reverse to the upside. A bearish divergence occurs when the price of the security makes a higher high while the GMMA makes a lower low. This indicates that the trend may be about to reverse to the downside.

The GMMA can also be used to identify support and resistance levels. Support is a level where the price of the security has difficulty falling below, while resistance is a level where the price of the security has difficulty rising above. The GMMA can be used to identify these levels by looking for places where the price of the security has bounced off of the GMMA.

The GMMA is a versatile technical indicator that can be used to identify trends, potential reversals, and support and resistance levels. It is a valuable tool for traders of all experience levels.

Here are some additional resources that you may find helpful:

* [Investopedia: Guppy Multiple Moving Average](https://www.investopedia.com/terms/g/guppy-multiple-moving-average.asp)
* [The Balance: Guppy Multiple Moving Average](https://www.thebalance.com/guppy-multiple-moving-average-gmma-4176700)
* [StockCharts: Guppy Multiple Moving Average](https://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:guppy_multiple_moving_average_gmma)

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