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High-Low Average (HL2)

What is High-Low Average (HL2)?​

High-Low Average (HL2) is a simple price indicator that calculates the average of the high and low prices of a candle. It provides a measure of the central price tendency based on the trading range of each period.

The formula for HL2 is:

HL2 = (High + Low) / 2

Key Points:​

  • Represents the midpoint of a candle's trading range
  • Often used as an alternative price reference to closing price
  • Provides a balanced view of price action by considering both extremes
  • Can be used as input for other technical indicators

How to Add a High-Low Average (HL2) Indicator?​

  1. Go to Indicators → "+" button
  2. Select High-Low Average (HL2)
  3. Configure your settings as shown in the interface
  4. Click "Add" to add the indicator to your strategy

Configurable Parameters in HL2​

1. On Data​

  • Select which price data you want to apply the HL2 calculation to
  • Typically uses candlestick data

2. Time Frame​

  • Defines the candle interval (5 = 5-minute candles as shown in the image)

3. Offset​

  • Shifts the indicator forward or backward (0 in the image) in time
  • Positive values move the indicator to the right, negative to the left

Element Name​

  • The default label is _hl2 as shown in the image
  • You can rename this indicator for clarity in your strategy code

Use Cases for High-Low Average (HL2)​

  • Alternative Price Reference
    → Use as an input to other indicators instead of close price
    → May provide smoother results in volatile markets

  • Support and Resistance Identification
    → HL2 can help identify potential support and resistance levels

  • Trend Direction
    → Compare current HL2 with previous values to determine trend direction

  • Custom Indicator Input
    → Basis for custom indicators that need a balanced price representation

  • Moving Average Calculations
    → Use as input for moving averages to create a midpoint-based MA

Next Steps​

✅ Compare trading results using HL2 versus close price as inputs
✅ Experiment with HL2 as source data for momentum indicators
✅ Consider combining with Typical Price (HLC3) or OHLC4 for comparison
✅ Test HL2 as an entry/exit price reference in strategies