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Trading with Guppy

When you say ‘Guppy’, most people think of the fish. So, I’ve put up an image of the fish – but this has more to do with ‘fishing’ than with fish. Very strange indeed.

I have to admit I saw his system many months ago and at that time when I saw ‘Guppy trading’, I simply thought it was some nonsense about some fish and ignored it. Oh well – that’s bad. I should have looked closer instead of being limited by unconscious images in my head.

PrintOk – Daryl Guppy is the man who invented the Guppy trading indicator and technique. Some may become pre-occupied with ‘Who is Daryl Guppy? Never heard of him!!’ – and that’s fine. Google is your friend – but you will find that he does not have a major web presence. Others have written much about him and his techniques, in trading circles. But let’s not remain pre-occupied with the man. The important thing is that he developed a system that was modified by others that brings good results for trend-following trades. What’s that? That’s where the big money is. This is about following big trend movements for hundreds of points instead of the usual 100 or so.

This is only a brief introduction. There are several links and videos below that explain further what it’s all about. I should say the usual, that no system is perfect or near perfect – and that applying the technique obviously requires patience, practice and much experience in order to gain skill at it. As always we recommend that new traders experiment in the risk free environment of demo accounts in gaining the right skills. Knowledge is useless unless applied with skill. So, Guppy trading is not gonna make you a millionaire – but you using the technique carefully could well make you your first million. It all depends on you – not Guppy.

The Guppy indicator is called: Guppy Multiple Moving Averages (GMMA). All the lines you see in these charts below may appear scary at first glance. You might think, “I’m not a trading geek – get me outta here” – and that’s fine. The reality is that all the lines are there for a good reason: to spot what’s known as compression points. That simply means the convergence of exponential moving averages (EMAs). You don’t have to be IT literate to have these lines drawn on the charts. Nearly every good trading platform will draw them automatically once you select the GMMA indicator. We recommend Tradingview.

In essence the technique and indicator:

  1. Assist in separating market moves made by small traders from the big traders with the big money. And it’s the big boys you want to be with, to make the big money – right?
  2. Help to spot changes in trends in the markets and to follow the right trends for maximum gain.
  3. Help find optimal entry and exit points for trades.

Successful application of Guppy requires a sniping approach to the markets. That means vigilance, waiting, patience and good timing. There are other indicators that can help find Guppy breakouts of price trends – but I do not distract myself onto that in this post.

Guppy has written two excellent books:

  1. Trend Trading: A Seven Step Approach (2012) and
  2. Guppy Trading (2011)

These two books go into much detail not only about Guppy’s methods. Most importantly he describes some 6 or 7 steps in his technique. He warns about a simplistic system of picking entry points just based on his indicator alone.

The charts below show what could have happened using the GMMA. Please note that the Guppy trading criteria are not applied rigidly on the following charts. They are for illustrative purposes only. Refer to videos below for stricter and proper criteria. The following GMMAs have been drawn with Chris Moody’s version of the GMMA. I don’t know Chris Moody. He’s just another expert trader out there who gives away stuff for free.

Screen Shot 06-23-15 at 01.42 AMScreen Shot 06-23-15 at 12.28 AM

 

Screen Shot 06-23-15 at 08.24 PM

 

Fuller details of how the GMMA works is at LazyBear’s Google Drive. Just get it and read it. Jeez! Look, I don’t know who LazyBear is!! He’s some guy that writes Pine Script code that makes wavy lines on Tradingview – and he does this for free! I don’t even know what Pine Script is, other than it’s a special sort of code for drawing the wavy lines. It’s a strange world out there for some noobs who can’t understand that some of the best stuff is free and most of the junk costs an arm and a leg.

Now for the videos. I don’t know these people but I can say that what’s being said in them matches what Daryl Guppy said and the good stuff from LazyBear.

The following video recommends 15 min time frames for trading, but in reality GMMA can be used on hourly, 4-hourly, or daily charts. It depends on how you want to play it.

Guppy giving a lecture on his system at IG in Singapore. This is really essential viewing. He gets to his system at the 18:21 mark.

Interviews with Guppy below

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