What Price Should Be Used?

Since Paul Levine8 always used the mean price, (H+L)/2, of each data point in his calculations of the MIDAS curves, and since mean prices were what he plotted on his charts, when a MIDAS curve provided support or resistance to price, it appeared on his charts as the price coming to and touching (or nearly touching) the curve and then turning away from it. But, in this book, we're using modern technical analysis charting software, which usually shows a price bar, or box, or candlestick, not just one price point. If, in Figure 2.1, I had calculated that resistance curve with the mean prices instead of the highs, the curve would have started at the middle of the December 18, 2009, bar, and then passed well within the January ...

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