McGinley Dynamic Oil Analysis and McGinley Dynamic Trading 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 crude trading price movements closely in both a fast and a slow moving market.

Crude Analysis and Generating Trading 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 crude trading price periods)

^ = Power of

Bullish, Buy Oil Signals and Bearish, Sell Signals

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

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

Analysis in Oil Trading