McGinley Dynamic Bands

Adaptive price bands using McGinley Dynamic for dynamic support and resistance levels.

About the McGinley Dynamic Bands

McGinley Dynamic Bands creates upper and lower price bands around price at a volatility-based distance, using a deviation model and multiplier around the McGinley Dynamic as the smoothing baseline.

What It Measures

McGinley Dynamic Bands measure adaptive price channels that create dynamic support and resistance levels using the McGinley Dynamic for smoothing. The indicator establishes upper and lower bands using a deviation model (for example, standard deviation) and a deviation multiplier, so the band width expands during high volatility and contracts during low volatility, while the McGinley Dynamic's self-adjusting mechanism responds to market speed changes, making the bands more reactive during volatile periods and more stable during consolidation.

There is no separate optimization analysis here, as using the McGinley Dynamic as the smoothing engine is itself an optimization over traditional moving average band calculations.

When to Use

Trend Identification: Price position relative to the bands helps confirm trend direction and strength
Dynamic Support/Resistance Detection: Bands act as adaptive support and resistance levels that adjust to market conditions
Volatility Assessment: Band width relative to price provides insight into current volatility levels
Breakout Signal Detection: Price breaks beyond the bands may signal strong momentum or trend changes
Price Channel Trading: The bands define trading channels for range-bound and trending strategies

Interpretation

Price at Upper Band: Potential resistance level; consider taking profits, reducing positions, or waiting for pullback before entering
Price at Lower Band: Potential support level; consider buying opportunities or covering short positions
Price Breaking Above Upper Band: Strong bullish momentum; may signal trend continuation or exhaustion depending on context
Price Breaking Below Lower Band: Strong bearish momentum; may indicate capitulation or continuation of downtrend
Band Width: Wider bands indicate higher volatility and uncertainty; narrower bands suggest consolidation
Price Between Bands: Normal trading range; price tends to oscillate between support (lower band) and resistance (upper band)
Band Convergence: Narrowing bands may precede significant price moves or breakouts

Example Usage

use centaur_technical_indicators::candle_indicators::bulk::mcginley_dynamic_bands;
use centaur_technical_indicators::DeviationModel;

pub fn main() {
    // fetch the data in your preferred way
    // let close = vec![...];  // closing prices
    
    let period = 20;
    let deviation_multiplier = 2.0;
    let previous_mcginley_dynamic = 0.0;  // Use 0.0 for the first calculation
    
    let bands = mcginley_dynamic_bands(
        &close, 
        DeviationModel::StandardDeviation,
        deviation_multiplier,
        previous_mcginley_dynamic,
        period
    );
    println!("McGinley Dynamic Bands: {:?}", bands);
}

import centaur_technical_indicators as cti

# fetch the data in your preferred way
# close = [...]  # closing prices

period = 20
deviation_multiplier = 2.0
previous_mcginley_dynamic = 0.0  # Use 0.0 for the first calculation

bands = cti.candle_indicators.bulk.mcginley_dynamic_bands(
    close,
    deviation="StandardDeviation",
    multiplier=deviation_multiplier,
    previous_mcginley_dynamic=previous_mcginley_dynamic,
    period=period
)
print("McGinley Dynamic Bands:", bands)

import init, { 
    candle_bulk_mcginleyDynamicBands,
    DeviationModel
} from 'https://cdn.jsdelivr.net/npm/centaur-technical-indicators@latest/dist/web/centaur-technical-indicators.js';

await init();

// fetch the data in your preferred way
// const close = [...];  // closing prices

const period = 20;
const deviationMultiplier = 2.0;
const previousMcginleyDynamic = 0.0;  // Use 0.0 for the first calculation
const deviationModel = DeviationModel["StandardDeviation"];

const bands = candle_bulk_mcginleyDynamicBands(
    close,
    deviationModel,
    deviationMultiplier,
    previousMcginleyDynamic,
    period
);
console.log("McGinley Dynamic Bands:", bands);