McGinley Dynamic

Notes:

These indicators and concepts are specifically designed for TradingView.com

‍

‍

Overview

The McGinley Dynamic is a technical indicator developed by John McGinley in the 1990s. It is a moving average that is designed to have a smoother curve than traditional moving averages, making it more responsive to changes in price trends.

How to Trade

The McGinley Dynamic is typically used to identify trends and determine entry and exit points for trades. When the price is above the McGinley Dynamic, it is considered to be in an uptrend, and traders may look for buying opportunities. When the price is below the McGinley Dynamic, it is considered to be in a downtrend, and traders may look for selling opportunities.

One common trading strategy using the McGinley Dynamic is to wait for the price to cross above or below the indicator before taking a trade. For example, if the price crosses above the McGinley Dynamic, this may be considered a buy signal, while if the price crosses below the McGinley Dynamic, this may be considered a sell signal.

‍

How to Calculate

The McGinley Dynamic is calculated using the following formula:

MD = MD1 + (Price - MD1) / (N * (Price / MD1) ^ 4)

where MD is the current value of the McGinley Dynamic, MD1 is the previous value of the McGinley Dynamic, Price is the current price of the asset, and N is the number of periods used to calculate the moving average.