What it does
The McGinley Dynamic is an adaptive moving average that adjusts its own speed to the market: its formula divides the smoothing increment by a factor of the ratio between price and the current indicator value raised to the fourth power. The effect is that it speeds up in downmoves and slows in upmoves, hugging price more closely than an EMA of similar length while whipsawing less. John McGinley designed it to solve the fixed-lag problem of conventional averages.
How to add it
Click Indicators (ƒx) in the header.
Search “McGinley Dynamic” and click the result.
Hover its legend row and click the gear to open settings.
How traders use it
- Use it exactly like a moving average but with more trust in fast markets: price above a rising Dynamic favors longs, below a falling one favors shorts.
- It tracks price closely enough to serve as a trailing stop reference tighter than an SMA/EMA of the same nominal length.
- Pullbacks to the Dynamic line in a trend are entry zones, and it holds those tests more cleanly than fixed averages because it adapts to the move's speed.
- Substitute it for the EMA in crossover systems to reduce whipsaw from lag mismatch.
- Its slope changes are meaningful earlier than an equivalent EMA's; a flattening Dynamic is an early caution flag.
Inputs
| Input | Type | Default | Range / Options |
|---|---|---|---|
| Period | number | 14 | 1–500 |
| Source | select | close | Close / Open / High / Low / HL2 / HLC3 / OHLC4 |
Plots & styling
| Plot | Style | Default color |
|---|---|---|
| McGinley | line | #2196F3 |
Every plot's color, line width and visibility can be changed on the Style tab. Precision, price-scale labels and status-line values are configurable at the bottom of the Style tab.
Tips
- Its price-scale label can be switched off per-indicator at the bottom of the Style tab if the axis gets crowded.
- Drag the indicator to its own pane from the legend ⋯ menu if it crowds the price chart.
- Double-click any of its lines to jump straight into the settings dialog.
Watch out for
- The asymmetric speed (faster down than up) means signals behave differently on the short side than the long side, which surprises symmetric-system builders.
- It reduces but does not eliminate lag, and in whippy ranges it still crosses price repeatedly.