Weighted Close

What Is the Weighted Close Indicator?

The Weighted Close indicator helps to identify a prevailing trend. It's an average of a period’s high, low, and close, with the close receiving double weight given its importance of mark-to-market. Weighted Close is plotted as a line that can be displayed in a separate panel or overlaid on the price chart, similar to the Typical Price indicator.

How To Calculate the Weighted Close Indicator

The Weighted Close averages the high, low, and close but gives more weight to the closing price. The formula is as follows:

$$Weighted\nobreakspace Close = ((High + Low + (Close * 2)) / 4$$

There are several ways to apply the Weighted Close to your trading. You can use it as a standalone indicator or with other trend-following indicators. For example, if you're using the Weighted Close with a moving average, consider it a buy signal when it crosses above the moving average. Conversely, when the Weighted Close crosses below a moving average, consider it a sell signal.