McGinley Dynamic 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 market. Thus its name, dynamic.

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

Trading Analysis and Generating Signals

This gold indicator is better at avoiding whipsaws 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 & 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 the price is crosses above the indicator.
• Bearish, Sell Signal - A sell signal is generated when price is crosses below the indicator.

Analysis in XAUUSD