McGinley Dynamic Analysis & 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 price movements closely in both a fast and a slow moving market.

Trading Analysis & Generating Trading Signals

This 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 technical indicator

N = smoothing factor (of price periods)

^ = Power of

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

Technical Analysis in Stock Trading