In this article we present a custom indicator for Metatrader 4 that displays the Guppy Multiple Moving Averages (GMMA) indicator on any price chart. The indicator can be modified to calculate moving averages with different types of prices (such as closing price, opening price or maximum price) and to use different moving averages instead of EMA, such as SMA and WMA.
Before talking about this modified indicator, we are going to explain what the GMMA consists of.
What is Guppy Multiple Moving Average?
The Guppy Multiple Moving Average (GMMA) indicator provides an interesting alternative to other popular technical indicators. Developed by Australian trader Daryl Guppy, the GMMA uses 12 different exponential moving averages (EMAs) in an effort to analyze market behavior at multiple levels.
The Guppy Multiple Moving Average attempts to identify trends by combining two groups of moving averages with different time periods. Long-term EMAs represent the interests and behaviors of investors who have taken a long-term approach to a given market. Short-term EMAs represent traders or speculators trying to capture short-term profits.
How is the GMMA calculated?
The GMMA Multiple Moving Average is created using two sets of exponential moving averages:
Short Term – The first set of moving averages has a relatively short time frame and is used to assess short-term trading activity. The number of periods used in these exponential moving averages is usually 3, 5, 8, 10, 12, and 15. This is an indicator of the behavior of short-term traders and speculators in the market.
Long Term: The second set of moving averages use extended time frames and is used to assess long-term investor activity. The number of periods used in these exponential moving averages is usually 30, 35, 40, 45, 50, and 60. This is a proxy for long-term investor behavior in the market.
Now we are going to talk about the GMMA indicator for Metatrader 4.
GMMA Multiple Moving Average for Metatrader 4
Actually, the calculation of the GMMA moving average is quite simple, especially when compared to other more complex moving averages such as FRAMA or KAMA. It is only necessary to add 6 short-term EMAs and 6 long-term EMAs with different periods on the same price chart.
That’s why we’ve put together a free custom indicator that displays the Guppy Multiple Moving Average overlaid on the price action on any chart and timeframe of your choice.
The version of the GMMA Indicator for MT4 that we have developed is called Guppy-GMMA.mql4, and it is available for free download at the end of this article.
Although it is a very interesting trend analysis indicator that shows a series of advantages, it should not be used alone as the only criterion to open or close positions in the market. It is best used as part of a complete and well-evaluated trading strategy.
A price chart in the EUR/JPY currency pair with the Guppy Multiple Moving Average indicator overlaid on top of the price action is shown in the image below:
As the image above indicates, the Guppy Multiple Moving Average clearly identifies trending markets when there is a wide gap between the two EMA groups and ranging markets when the two EMA groups are intertwined or very little apart. Both groups of EMAs allow analyzing in more detail the behavior of the different market participants: short-term traders and long-term investors.
This indicator has multiple setting parameters as it is designed to select the price type used in the calculation of moving averages (Close, Open, High, Low, Medium, Typical, and Weighted), the type of moving average (SMA, EMA, SMMA, and WMA) and the periods used in the calculation of each of the EMAs. These parameters are shown in the following image:
This flexibility allows the trader to try different combinations of moving averages, calculation periods and price type that can provide interesting results and are better adapted to what they require.
Download and installation of the GMMA indicator for Metatrader 4
This modified Guppy Multi-Average Indicator was developed by the team at ForexDominion.com and can be downloaded and used free of charge.
The GMMA indicator is installed according to the standard methodology for the installation of indicators in MT4. You can download it at the following link: GMMA Indicator for MT4
You can access a complete list of free modified indicators for MT4 and MT5 platforms in the following section of the site: List of Custom Indicators For Metatrader
Are you interested in developing a custom technical indicator or Expert Advisor for MT4 or MT5?
If you are interested in developing a custom indicator or EA based on your own trading strategy or idea but don’t have the time or knowledge to do it yourself, we can get the job done for you in no time and at the best prices.
You can contact us by:
-rcanessa@gmail.com
