McGinley Dynamic Indices Technical Analysis and McGinley Dynamic Indices 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 stock indexes trading market. Thus its name, dynamic.

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

Indices Technical Analysis and Generating Indices Trading Signals

This indicator is better at avoiding whipsaws compared to the original moving average.

Calculated using the formula:

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

D1 = previous value of Dynamic indicator

N = smoothing factor (of stock indexes price periods)

^ = Power of

Bullish, Buy Indices Trading Signals and Bearish, Sell Indices Trading Signals

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

• Bullish, Buy Indices Trading Signal - A buy stock indices signal is generated when stock indexes price is crosses above the indicator.


• Bearish, Sell Indices Trading Signal - A sell stock indices signal is generated when stock indexes price is crosses below the indicator.

Technical Analysis