Direct Answer
Median price is the midpoint of a single bar's high and low, ignoring the open and close. It represents the center of the bar's traded range. It shows the middle of the bar's range and is often used as an input to other indicators in place of the close.
Median Price: Formula, Meaning, Signals, Examples and How to Use It
How Is Median Price Calculated?
Median price is the midpoint of a single bar's high and low, ignoring the open and close. It represents the center of the bar's traded range.
Formula: Median price = (high + low) / 2
Inputs:
- High
- Low of each bar
Worked example. A bar with a high of 105 and a low of 98 has a median price of 101.50. The inputs are illustrative numbers, not market data.
Reading it. It shows the middle of the bar's range and is often used as an input to other indicators in place of the close. Because it ignores the close, it does not reveal where the bar finished within its range.
Limits. It is not a statistical median of prices traded during the bar; it only depends on the two extremes. Two bars with very different closes can have the same median price.
What is Median Price?
Median price is the midpoint of a single bar's high and low, ignoring the open and close. It represents the center of the bar's traded range.
How to use Median Price
It shows the middle of the bar's range and is often used as an input to other indicators in place of the close. Because it ignores the close, it does not reveal where the bar finished within its range. A reading alone is never a buy or sell signal; it needs context from price structure, volume, volatility and the broader market regime.
Strengths
- Using only the high and low makes it independent of where the bar closed, so it describes the span rather than the direction.
- The two-field formula can be computed from any bar data that carries a high and a low, including feeds that omit open and close.
- Reproducible when the formula and data convention are fixed.
Weaknesses and limitations
- A bar with a long wick makes the value jump even if most of the trading happened elsewhere in the bar.
- Leaving out the close discards the price most often used as the session's settled value and as the base for returns.
- Correlated indicators can create false confidence by repeating the same underlying information.
Editorial and risk note
This page is educational content, not individualized investment advice. It should not imply guaranteed prediction, accuracy or outperformance.
Frequently Asked Questions
Is Median Price a buy or sell signal?
No. It shows the middle of the bar's range and is often used as an input to other indicators in place of the close. It is not a statistical median of prices traded during the bar; it only depends on the two extremes. A trade built on it still needs a trigger, an invalidation rule, a position size and realistic execution assumptions.
What is the best setting for Median Price?
Median Price takes these inputs: high; low of each bar. There is no universal best setting for the tunable ones, so test them across instruments, regimes and out-of-sample periods and favor stable parameter regions over one historical winner.
Can Median Price be used by itself?
It is not a statistical median of prices traded during the bar; it only depends on the two extremes. Two bars with very different closes can have the same median price. For that reason it is read next to measures of direction, participation, valuation, liquidity and risk, not alone.
Does Median Price work on every timeframe?
The calculation (Median price = (high + low) / 2) can be run on any bar size, but behavior is not portable: a reading on a five-minute chart describes a very different market window from the same reading on a daily chart. Validate the exact timeframe before relying on it.
Why does Median Price give false signals?
A bar with a long wick makes the value jump even if most of the trading happened elsewhere in the bar. Leaving out the close discards the price most often used as the session's settled value and as the base for returns. Lag, noise and regime changes add to this, because market participants react to new information after the reading is calculated.
How should Median Price be backtested?
Rebuild Median Price from high using point-in-time data, write the rules before testing, include delisted securities where relevant, model realistic fills and costs, reserve a validation sample and compare with a simpler baseline.