Calculation
The Median Price indicator (MP) is calculated by adding the highest and lowest price of the observation period and then dividing this by two. The result is the average price over the observation period.
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Formula
MPt = (Ht + Lt) / 2
Interpretation
The median price produces a simple line chart of the average prices. One finds it helpful when testing Moving Average penetration systems to display Moving Averages of the Median Price indicator, rather than the instrument’s closing price.