McGinley Dynamic Analysis & McGinley Dynamic Signals

Developed by John McGinley

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

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

Stocks Analysis & How to Generate Signals

This indicator is better at avoiding whip-saws compared to the original moving average.

Calculated using the formula:

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

D1 = previous value of Dynamic indicator

N = smoothing factor (of price periods)

^ = Power of

Bullish, Buy Signals and Bearish, Sell Signals

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

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

Analysis in Stocks Trading