DEFINITION of 'McGinley Dynamic Indicator'

A little known technical indicator developed by John McGinley in 1990. The indicator attempts to solve a problem inherent in moving averages which use fixed time lengths (ie. a 10 or 21 period moving averages), a problem that causes those moving averages to be outrun in fast markets.

BREAKING DOWN 'McGinley Dynamic Indicator'

The speed of the market is not consistent; it frequently speeds up and slows down. Traditional moving averages fail to account for this market characteristic. The McGinley Dynamic solves this problem by incorporating an automatic adjustment factor into its formula which speeds or slows the indicator in trending or trading markets.

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RELATED FAQS
  1. What is the McGinley Dynamic?

    The McGinley Dynamic is a little known technical indicator developed by John McGinley in 1990. The indicator attempts to ... Read Answer >>
  2. Why is the McGinley Dynamic Indicator important for traders and analysts?

    Learn about an adaptation of moving average analysis called the McGinley dynamic indicator, a technical indicator that can ... Read Answer >>
  3. What is a common strategy traders implement when using the McGinley Dynamic Indicator?

    Learn how to use the McGinley dynamic indicator to create a simple trading strategy that provides both trading signals and ... Read Answer >>
  4. What are the best technical indicators to complement the McGinley Dynamic Indicator?

    Read about the strengths and weaknesses of the McGinley dynamic indicator, and find out which technical indicators are best ... Read Answer >>
  5. What is the McGinley Dynamic Indicator formula and how is it calculated?

    Discover the McGinley dynamic indicator, which is designed to resolve issues based on the subjective placement and static ... Read Answer >>
  6. How do I use McGinley Dynamic Indicator to create a forex trading strategy?

    Discover how to use the McGinley dynamic indicator to confirm or reject trading signals produced by other technical indicators ... Read Answer >>
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