📊 TECHNICAL
McGinley Dynamic
A self-adjusting moving average developed by market technician John R. McGinley that speeds up or slows down automatically to stay in gear with the market's actual speed.
60KUses
3300Likes
0Comments
Live Demo — McGinley Dynamic applied to NIFTY 50 (illustrative)
PriceEMA(9)EMA(21)SMA(20)
What is the McGinley Dynamic?
Developed by John R. McGinley, a Certified Market Technician, to fix a core complaint about conventional moving averages: they lag in fast markets and whipsaw in slow ones. The formula embeds a self-adjusting factor so it automatically tracks price without manual re-tuning of the period.
Formula
MD_today = MD_prev + (Price - MD_prev) / (N * (Price/MD_prev)^4)Parameters
| Parameter | Default | Description |
|---|---|---|
| Period (N) | 14 | Base period controlling the average's baseline responsiveness |
| Source | Close | Price field used |
Signal Interpretation
- Price crossing the line is used as an adaptive trend signal.
- The line hugs price more tightly during fast moves and smooths out during slow, choppy periods.
- A widening gap between price and the line can flag an overextended move.
- Two lines at different periods crossing work like any fast/slow MA crossover system.
Tips & Best Practices
- Often needs less period re-optimization across market regimes than a plain SMA/EMA.
- Works well as a drop-in replacement for an SMA of the same period in existing strategies.
- Still lags at major turning points — pair with price action or momentum indicators.