McGinley Dynamic Analysis and McGinley Dynamic Signals

Developed & Created 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 and How to Generate Trading Signals

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

Calculated using the formula:

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

D1 = the previous value of the Dynamic indicator

N = smoothing factor (of price periods)

^ = Power of

Bullish, Buy Trading Signals and Bearish, Sell Trade Signals

McGinley Dynamic should be combined with moving averages to form a trading strategy. McGinley Dynamic should be used as the smoothing mechanisms where the MA Moving Average is choppy or oscillating.

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

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