Typical Price – Average

#movingaverage #trendfollowing 

Inventor:  

A moving average calculated on the Typical Price of each bar – (High + Low + Close) / 3 – instead of just the close. The typical price represents the whole bar’s business, not only its final tick, so the average is slightly steadier and harder to distort with a single closing spike. Used exactly like a normal moving average. 

Default period: 20 

Rising average indicates uptrend. Falling average indicates downtrend. 

Reads the same as a normal moving average, with slightly calmer behavior on spike closes. 

Useful readings: 

Price above rising average: Uptrend in progress 

Price below falling average: Downtrend in progress 

A wild close that a normal MA reacts to barely moves this one: fewer fake crosses 

Average flat: Sideways market, ignore crosses 

Also the base of other tools: MFI and CCI are built on typical price 

Useful on stocks that often close with manipulated or spiky final prints 

Objective rules: 

Bullish: Price closes above the typical price average AND the average is rising. 

Bearish: Price closes below the typical price average AND the average is falling. 

Long exit: Two consecutive closes below the average 

Flat filter: Skip signals when the average has moved less than 1% in 20 bars 

What makes it unique: 

It averages the whole bar’s business, not just the closing tick, making it resistant to end-of-day spikes and manipulation. It is also the quiet foundation under CCI and MFI. 

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.