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

Stock Analysis & How to Generate 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 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 MA is choppy or ranging.

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

Analysis in Stock Indices Trading