Being in the world of trading, a PAMM trader has to always deal with dynamic market condition. He needs a deep knowledge and understanding to conquer the obstacles in such a crowded and risky market. To support his daily trading, a PAMM trader can have a tool which is called ‘an indicator ‘ in order to predict the trading signals and help him to make an accurate decision. Correct indicator(s) used in the trading will lead him to the victory in making a great profit, something that all traders could have dreamt all the time. The characteristic of each trader will usually determine indicator(s) used in the trading.
There are many indicators in forex trading. One popular indicator is called ‘Guppy’. This indicator is introduced by Daryl Guppy, an Australian trader. Gupy indicator can show smooth lines and signals. This is the reason behind its popularity among traders. Guppy consists of two different groups of Moving Average : Guppy Short and Guppy Long. Each group will reflect the relation between PAMM traders and PAMM investors. These Moving Average groups are designed to determine trends in daily basis. That’s why this indicator will be useless without the existing of market trends. Because this indicator is quite difficult-to-read for newbies, it’s mostly used by professional traders.
The first Moving Average (Guppy Short) group is formed by six EMAs with 3, 5, 8, 10, 12 and 15 periods. This group is giving the trend’s direction and strength in the short-term trading. While the second group is combined by the other six EMAs with 30, 35, 40, 45, 50, and 60 periods and is usually used to forecast long-term trend’s direction and strength where the professional traders are in. Unfortunately, this indicator hasn’t been set up in the default Metatrader4, so trader has to download it by himself.
How to read trading signals with Guppy ?
Generally, traders will always anticipate the reversal trend. They will enter the market when there is a change in the Moving Average. A strong trend movement will be a very helpful signal for traders who trade in a long-term trading. But, without a deep understanding about the current trend from the traders, this signal will be useless. Different with the usual Moving Average, in Guppy the crossover is not really important. It will be more important to watch the Moving Average spacing in each group.
A strong trend can be identified if the Moving Average group in Guppy Long is in parallel position or when Moving Average group in Guppy Short are in a bounce position. If both EMAs group are fluctuating higher than the usual and creating convergence, it could be a signal of a weakening trend.
Happy trading through PAMM Investments !
Don’t forget to read this important article for PAMM trader
1. How to become a PAMM Trader
2. Understanding your Forex Trader Level as PAMM Trader