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Typical Price

The typical price is a simple average of a security’s high, low, and closing prices for a given period, used in technical analysis to gauge market sentiment. It provides a more balanced view of a security’s price than just the closing price. The typical price is often used as a basis for calculating various technical indicators, such as the Commodity Channel Index (CCI) and the Money Flow Index (MFI).

Example

To calculate the typical price for a stock with a high of $100, a low of $90, and a close of $95, the formula is ($100 + $90 + $95) / 3 = $95.

Key points

• A simple average of a security’s high, low, and closing prices for a specific period.

• Used in technical analysis as an indicator of market sentiment.

• Provides a more balanced view of price action than just the closing price.

Quick Answers to Curious Questions

The typical price includes the high and low prices, providing a more balanced representation of market activity than the closing price alone.

It is calculated as the average of the high, low, and closing prices for a specific period.

Indicators like the Commodity Channel Index (CCI) and the Money Flow Index (MFI) often use the typical price to gauge market sentiment and trend strength.