A stack of moving averages of increasing length plotted together, so the spacing and ordering of the lines describe trend strength.
When the averages are in order and widely spaced, the trend is strong and consistent. When they compress and tangle, the market is in consolidation and directional signals are unreliable. The visual is the point: one glance summarises many lookbacks.
Guppy's multiple moving average is the best-known version, splitting the ribbon into short-term and long-term groups so the interaction between trader and investor timeframes is visible.
A ribbon contains no information that the individual averages do not, and it adds a lot of lines to the chart. If it helps you avoid trading in tangled conditions it earns its place; if it becomes eight more things to interpret, it is chart-clutter.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Fast and slow moving averages crossing. A moving average is the average of the last few closing prices, redrawn each period. An average over fewer periods turns sooner than one over many, so the two lines cross whenever the recent pace of the market changes.Range versus trend. On the left price keeps bouncing between the same floor and ceiling, which is a range. On the right each high and each low is higher than the last, inside a pair of sloping lines called a channel.
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