TREND VOLATILITY LINE (TVL)
By Daryl Guppy
The Guppy Multiple Moving Average (GMMA) Trend Volatility
Line (TVL) is designed to capture changes in trend volatility rather than
changes in price volatility. In the bull market in 2006-2007 it was
sufficient to understand price volatility and use this for trend management.
Increased price volatility in the 2008 bear market showed the limitations of
The GMMA TVL was originally developed as a
method for intraday scalping. It starts with a breakeven line. This
reference line is used to define the changes from Hope to Confidence to
Certainty (HCC) in trade entry management. The HCC method used as a method
of scaling into trade positions.
The GMMA TVL is an extension of the HCC
method and allows traders to define the duration of appropriate volatility
so a consistent stop loss can be set. The TVL is adjusted up or down in a
way consistent with changes in trend volatility rather than changes in price
volatility. It is used for trading long and short.
Further investigation of this trend
management method used the fractal nature of the GMMA to extend its
application to intraday and multi-day trend trade management in volatile
index, derivative, commodity and stock markets. This includes a time frame
step-up for intraday management after a scalping entry. It then transfers to
a end of day management for long term trend exposure and management.
A DVD explaining the application of the TVL
method and the way it is used to lower the risk of entry and provide for
better long term trade management based on trend volatility is
available NOW. Please
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