Weighted Close Indicator calculates the average price change for an instrument while placing emphasis on the closing price. The Weighted Close can be plotted as a smooth line directly on the price chart. This indicator does not clearly show buy or sell signals, but it does provide a clear indication of the primary trend.
The weighted close is calculated by multiplying the close by 2, then adding the high and low, and then dividing the sum of these components by 4.
Methods of use:
1. You may compare Weighted Close to a moving average to define when an instrument is trending downward or upward.
2. The Weighted Close trends higher as the price continues upwards.
