Weighted Close Price (WCLPRICE)
Overview
The Weighted Close Price (WCLPRICE) is a price averaging technique that creates a single value representing the price action for each period by combining the high, low, and close prices with special emphasis on the close. By multiplying the closing price by two in its calculation, this indicator acknowledges that the closing price often represents the market's final consensus value for the period and may be more significant than the high or low prices reached during intraday volatility.
The formula (High + Low + Close × 2) ÷ 4 creates a smoothed price series that reduces market noise while maintaining responsiveness to price movements. This weighted average approach makes it useful as a price filter or as input data for other technical indicators that traditionally use only closing prices. The WCLPRICE can help traders identify the underlying price trend by dampening short-term fluctuations.
Interpretation & Trading Signals
Price Analysis Applications:
- Trend Identification: Rising WCLPRICE indicates upward price pressure
- Price Smoothing: Reduces noise compared to raw closing prices
- Input for Other Indicators: Can replace close price in moving averages or oscillators
- Support/Resistance: WCLPRICE levels can act as dynamic price references
Trading Strategies:
- Moving Average Crossovers: Use WCLPRICE with MAs for smoother signals
- Price Divergence: Compare WCLPRICE to actual close for momentum shifts
- Breakout Confirmation: WCLPRICE breaking key levels confirms price moves
Comparison with Similar Indicators:
- vs Typical Price: WCLPRICE gives 2x weight to close; Typical Price weights equally
- vs Median Price: WCLPRICE includes close twice; Median uses only (H+L)/2
- vs Close Price: WCLPRICE incorporates full price range, reducing gaps impact
Example Usage
Code examples will be available once the Rust implementation is complete.