Typical Price Moving Average Explained With Mini-Dow Future Chart

The typical price moving average combines the pivot point concept and the simple moving average. This guide explains what the typical price is and how to interpret it with the help of an example chart.

What Is the Typical Price Moving Average?

The moving average of typical price attempts to give a more realistic representation of where price has been by incorporating the high and low price into the most often used closing price.

As a result, typical price is seen as a purer simple moving average. Nevertheless, as this chart of the mini-Dow Jones industrial average futures contract illustrates, there is not much difference between either moving average.

The chart shows the slight difference between a 10-day simple moving average and a 10-day typical price moving average.

How the Pivot Point Is Calculated

Pivot Point = (High + Low + Close) / 3

The calculated pivot point number is then inputted into the simple moving average equation. Rather than the input of the closing price, the pivot point calculation is used.

Potential buy and sell signals for the typical price moving average indicator are discussed on the simple moving average indicator page.

Where to Trade Using Technical Analysis

Further Reading on Trend Indicators

These trend tools complement Typical Price Moving Average: Andrew’s Pitchfork, Gann Fans, and Triangular Moving Average.

FAQ

Is typical price and pivot point the same thing?

The moving average or typical price is sometimes only referred to as the pivot point indicator because they are one and the same thing.

The pivot point refers to the central price level, or the average high, low, and closing price from the previous day. The result of the pivot point calculation is also called typical price.