McGinley Dynamic Indices 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 stock indices market. Thus its name, dynamic.

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

Stock Indices Analysis & How to Generate Signals

This stock indices 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 indices price periods)

^ = Power of

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

Analysis in Stock Indices Trading