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Overview
The Typical Price indicator is simply an average of each day's price. The
Median Price and
Weighted Close are similar indicators.
Interpretation
The Typical Price indicator provides a simple, single-line plot of the day's average
price. Some investors use the Typical Price rather than the closing price when creating
moving average penetration systems.
The Typical Price is a building block of the
Money Flow Index.
Example
The following chart shows the Typical Price
indicator on top of Value Line's bar chart.
Calculation
The Typical Price indicator is calculated by adding the high, low, and closing prices
together, and then dividing by three. The result is the average, or typical price.
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