What is typical price?

It’s an indicator used in the technical analysis of stocks and financial markets. The typical price of an asset is calculated by adding the high, low and closing prices for a particular time period, and dividing the total by three.

Where have you heard about typical price?

The typical price will be plotted on a price chart, which can come in various formats. The most popular of these are bar charts and candlestick charts. They’re an easy way for traders to see a graphical representation of price action, whether it’s over a short or long timeframe.

What you need to know about typical price.

The direction of the moving average shows the trend of the market, and the slope indicates the strength of the trend. The typical price can be a more accurate indicator of a trend reversal than just the closing price alone.

Various indicators and trading systems use the typical price. These include the money flow index, which is used to measure the amount of money going in or out of an asset, and the commodity channel index, which is used to identify cyclical trends.

Find out more about typical price.

Read our definitions of technical analysis and money flow index.