In the context of the MFI, what is a typical price?

The typical price, as defined in the context of the Money Flow Index (MFI), is calculated as the average of the high, low, and close prices within a given period. This formula reflects a more balanced view of the price action during a trading session than individual price points would provide. By averaging these three values, the typical price gives insight into the common price level at which trading occurred, capturing the overall sentiment of the trading period. This is particularly significant in the analysis of money flow, as it helps to determine whether buying or selling pressure is dominating, which is fundamental for identifying potential price trends and reversals.