The Guppy Binary Options System Explained

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The Guppy System; Trading Shark Or Shark Bait

Now that I have come to realize that most websites touting free, reliable, no-risk binary options strategies that work are mostly just a bunch of BS I have started to focus my time more on unearthing strategies you can actually use. Most of the “free” systems really aren’t free, they require registrations and deposits at “trusted brokers” in order to get them. This poses a challenge to traders for two reasons. The first is that you there is usually no information about the system so you can’t evaluate it’s effectiveness and the second is how can you trust a system that relies on your deposits and trade volume to generate income not your profitability. I see a real conflict of interest in that, if the system really works and the providers really care about your success why can’t they just sell the system or make money based on your performance.

One place I have found that is a great resource for free trading strategies and resources are forums. There is a great forum here at BONET but the strategy I am looking at today can be found at BinaryOptionsDaily.com. The strategy is called the The Guppy System. It is based on an array of moving averages ranging from 3 candles out to 150 or more depending on your set up and preferences. The system is based on wave theories and makes good use of the moving averages to produce an easily recognizable signal. One of the things that I like about this system is that is a good one for newbies to start with and provides a platform to build more advanced trading strategies from.

What Is The Guppy System

The Guppy System was first developed by Daryl Guppy and described in his book Trend Trading. To set it up you will need to load 13 moving averages onto your chart. The ones used here are exponential moving averages. Exponential moving averages give added weight to the most recent data which caused them to track price action more closely than a simple moving average. This means that an exponential moving average (EMA) will give more signals than a simple one, and also more false signals. This is why this strategy uses so many moving averages. The averages are 3,5,8,10,12 and 15 all in light blue then 30,35,40,45,50 and 60 all in darker blue so you can tell the two groups apart. The final average is set to 200 and is used to set trend. This one should be colored brown or red in order to keep it separated from the rest. A 150 bar moving average can be substituted for the 200, especially with more active and volatile assets.

The signals are trend following. Starting with the 200 bar EMA to set the trend only take signals in line with the trend. When the EMA is pointing up or trending up the trend is up, if it is pointing down or trending down the trend is down. Once you establish trend wait for the longer term group of averages, the dark blue, to rollover in line with the trend. Once this happens wait for the shorter term group of averages to rollover in line the the trend as well. The very strongest signals will occur when the longer term group of averages is in line with the trend and completely crossed over so that the averages are in order. Two rules for trading with this strategy given by the author are to avoid trading against the 200 bar EMA and not to trade on shaky crossovers. I will say that you should never trade against the 200 bar moving average and to wait for confirmation before entering a trade. A confirmation would be a strong/definitive break of price above the short term group of moving averages and/or a pull back to retest once a break has happened.

Beware, The Guppy Is A Shark

What time frame to use? The beauty of this strategy is that it can be applied to a number of different time frames and in fact, takes time frame into consideration even though the author doesn’t discuss it. Think about it like this; a 30 bar EMA on the weekly charts is equal to 150 days (30 weeks X 5 days) so it is in fact equal to the 150 bar EMA on a daily chart. The array of averages used here are all short term and expiry should be treated as such but the signals themselves are good because they are in line with trend and time frame. So, back to time frame and which one to use….the author is using 5 minute charts for his examples and this is OK but I think 30 minute or hourly charts would be best for day and day to day traders that want to avoid the market noise present at the 5 minute time frame. I my self trade on the daily and hourly charts and have found this strategy to be effective on both.

144# Guppy Multiple Mas System

Guppy Multiple Mas System with filter Arrows

Submit by Paul 12/07/2020

Guppy Multiple Mas system is a trend following strategy based on Exponential moving averages.

Time Frame 15 min, 30 min, 60 min.

Financial Markets: Forex, Commodities, Indicies.

Expiry time: 3-5 candles.

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first guppy of exponential moving averages:

3 EMA, 5 EMA, 8 EMA, 10 EMA, 12 EMA, 15 EMA.

SDX pivot for intraday trading (optional).

second guppy of exponential moving averages:

30 EMA, 35 EMA, 40 EMA, 45 EMA, 50 EMA, 55 EMA.

Filter arrows indicator(15 min time frame setting 30, 30 min time frame setting 60, 60 min time frame setting 240,).

Trading rules Guppy Multiple Mas System

Wait for trade setups in the direction of the Guppy Multiple Mas.

Buy arrow filtered by

first guppy ema’s above second guppy ema’s.

Sell arrow filtered by

first guppy ema’s below second guppy ema’s.

Note: Flat Market wait for GMMa separation, No trading when GMMas are mixed.

This strategy is also good for trading intraday and swing trading withot binary options.

In the folder there is also the template for intraday trading.

In the pictures Guppy Multiple Mas System in action.

The Newbie Friendly Guppy System, Fish Food Or Shark Bait?

Guppy Moving Average Strategy For Binary Options Trading

The Guppy System may have a funny name but the results aren’t funny. This is a fantastic system for new and old traders that provides a series of easy to read signals in line with prevailing trends. It was first described by Darryl Guppy, long time trader, in his book Trend Trading. His system is based on wave theory, uses a complex set of moving averages and takes multiple time frame analysis into account without the messy use of multiple charts.

What Is The Guppy System

The Guppy System is not fish tank equipment if that is what you are thinking. It is a simple system based on moving averages that is both easy to use and effective. The most difficult thing about it is setting it up. It uses 13 exponential moving averages set up in 3 groups. The first two are groups of 6, 6 short term averages and 6 longer term averages, the third is a single average, the 200 bar. The averages are 3,5,8,10,12 and 15, the longer term averages are 30, 35, 40, 45, 50 and 60. The first group should be in light blue, the second group in dark blue and the 200 bar in red. The 200 bar can be substituted with the 150 for volatile assets and you can switch the whole array to simple moving averages if you want to weed out more of the false signals. The original system was designed for really short term trading using 5 minute charts.

The system is a trend following strategy, the 200 bar moving average being the trend setter. If it is moving up you look for bull signals, if it is moving down you look for bear signals. Signals occur once the short term and long term moving averages cross over the 200 bar average, in line with the trend. All moving average must have crossed for a signal to be valid. Once the first signal is fired additional signals occur whenever price retreat back past the short term array of moving averages and then recross in line with the trend. Strong signals occur when prices actually touch back to the longer term array. One way to find signals is to watch the spread between the averages. When they are wide you wait, when they are narrow you buy.

Why This Strategy Might Suck

This strategy might suck because you may have to wait a long time for a signal, even using the 5 minute charts. Signals rely on a full crossover of the short and long term moving averages so any reversals will take time to confirm and trading ranges could play havoc with your analysis.

Why This Strategy Doesn’t Suck

The strategy doesn’t suck. It may be time consuming, it may take a while for trends to establish themselves but the signals you will get will be very good ones. On top of that, once you catch a reversal you will be able to get a number of signals following it, until the next time prices reverse. The strategy is based on several well respected methods of analysis, incorporates multiple time frame analysis into one chart and can be used in multiple time frames.

My Last Thoughts On The Guppy System

The Guppy System may have a funny name but it doesn’t have funny results. What it has are results you can rely on, if you have the patience. Depending on the market and/or time frame you are trading it could take quite a while for tradable signals to develop. The good thing is that this system is great for any asset and can be used in any time frame so you can adjust as needed until a trade comes into focus. I can definitely recommend this for newbies and pros because it gives easy to read signals that are perfect for binary trading.

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