McGinley Dynamic Commodity Trading Technical Analysis & McGinley Dynamic Trading Signals

Developed by John McGinley

McGinley Dynamic aims to overcome the lag of the traditional simple and exponential moving averages, the indicator automatically adjusting itself relative to the speed of the commodities market. Thus its name, dynamic.

The indicator follows commodity price movements closely in both a fast and a slow moving commodity market.

Commodities Trading Technical Analysis & How to Generate Signals

This commodity technical technical indicator is better at avoiding whipsaws compared to the original moving average.

Calculated using the formula:

Dynamic = D1 + (Commodity Trading Price - D1) / (N * (Commodity Trading Price/D1)^4)

D1 = previous value of Dynamic technical indicator

N = smoothing factor (of commodity price periods)

^ = Power of

Bullish, Buy Commodity Trading Signals & Bearish, Sell Trading Signals

McGinley Dynamic should be combined with moving averages to form a trading system. McGinley Dynamic should be used as the smoothing mechanisms where the moving average is choppy or ranging.

• Bullish, Buy Commodity Trading Signal - A buy signal is generated when price is crosses above the indicator.
• Bearish, Sell Commodity Trading Signal - A sell signal is generated when price is crosses below the indicator.

Technical Analysis in Commodities Trading