Typical Price
Typical Price is another approximation of average price for each period and can be used as a filter for moving average systems.
Calculated as: (High + Low + Close) / 3
Typical Price is a component of the Money Flow Index and Commodity Channel Index.
Trading Signals
Intel is shown with 21-day exponential moving average (MA) and Typical Price (TP), used as a filter.
Mouse over chart captions to display trading signals.
Using the Single Moving Average System, note how many times you would have been whipsawed in/out of your position when price crosses the MA.
Compare this to the long [L] and short [S] signals when Typical Price is used as a filter.
The days marked are signal days. A trade would be entered on the next day.
Setup
See Indicator Panel for directions on how to set up an indicator.
Author: Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.