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Definition of 'HLC/3'

Average of High, Low, and Close for a bar/candle.

The HLC stands for High, Low, Close and the /3 divides the result by 3 to give you the average.

Some traders feel that this average is more representative of the true value of the price of a bar/candle in a chart. This is often used in place of the closing price when calculating moving averages such as the SMA, WMA, and EMA

Other similar alternatives to the HLC/3 formula that are popular are HL/2 and OHLC/4.

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