McGinley Dynamic Indicator

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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. Why is the McGinley Dynamic Indicator important for traders and analysts?

    John McGinley developed the McGinley dynamic indicator to solve an important problem with moving average indicators – their ... Read Full Answer >>
  2. What is a common strategy traders implement when using the McGinley Dynamic Indicator?

    A common trading strategy using the McGinley dynamic indicator is to follow the trading signals provided by the price crossing ... Read Full Answer >>
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    The exhausted selling model is a pricing strategy used to identify and trade based off of the price floor of a security. ... Read Full Answer >>
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