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Moving Averages & MACD Oscillators > Moving Average Systems > Multiple Moving Averages
Indicator Guide > Trend Indicators > Multiple Moving Averages
Indicator Guide > Moving Average Systems > Multiple Moving Averages
Indicators A ~ Z > Indicators M ~ N > Multiple Moving Averages
Contents > Indicators M ~ N > Multiple Moving Averages
Trend & Momentum Oscillators > Trend Indicators > Multiple Moving Averages

Multiple Moving Averages

The Multiple Moving Average indicator was devised by Daryl Guppy and consists of six short-term and six long-term exponential moving averages. The short-term MA's are 3, 5, 7, 10, 12 and 15 days and the long-term MA's are 30, 35, 40, 45, 50 and 60 days but these can be varied according to the Time Frame being traded. The short-term group represent traders' view of the market and the long-term group represent investors.

Trading Signals

Convergence and Divergence:

  • When moving averages within a group are parallel and close together, the group are largely in agreement;
  • When the moving averages widen, this signals divergent views within the group;
  • When moving averages converge, this is a sign that the group view is changing.

Trend strength:

  • Parallel long-term MAs signal long-term investor support and a strong trend; and
  • Short-term MAs tend to bounce off the long-term moving average group.

Trend weakness:

  • Both groups of MAs converge and fluctuate more than usual.

Trend start:

  • A change in price direction accompanied by expanding MAs in both groups.

Short-term reversals:

  • The short-term group diverge after crossing over before again converging.

Crossovers are not as important as spacing between the MAs in each group.

Example

Apple [AAPL] is displayed with multiple moving averages.

Apple Muliple Moving Averages

Mouse over chart captions to display trading signals.

  1. Widely-spaced down-sloping long-term moving averages [D] signal a strong down-trend
  2. Converging long-term moving averages [C] indicate uncertainty
  3. Go long [L] when long-term moving averages cross over, with the longest at the bottom
  4. Retracements [R] that do not disturb the long-term moving averages spacing present opportunities to increase your long position
  5. Widely-spaced up-sloping long-term moving averages [U] signal a strong up-trend.

Setup

Select Multiple Moving Averages in the left column of the Indicator Panel. Adjust the settings as required and save using the [>>] button.



 
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