Average Price¶
| Name | Type | Prerequisite | Use Cases |
|---|---|---|---|
| Average Price (AP) | Trend/Benchmark | OHLC Data | Provides a simplified representation of a single bar's price action. |
Definition¶
Average Price is a simple moving average of the Open, High, Low, and Close prices for a single period. It provides a representative price for the bar.
Mathematical Equation¶
\[
\text{Average Price} = \frac{\text{Open} + \text{High} + \text{Low} + \text{Close}}{4}
\]
Special cases¶
- Maximum possible value: Unbounded
- Minimum possible value: 0
- Behavior: Follows the price closely as it represents the average of OHLC. Plotted on the price chart.
Visualization¶
Trading Significance¶
-
Filtering: Used to filter out noise from using just the Close price.
-
Input: Often used as an input for other indicators.