Midpoint Price (MIDPRICE)
The Rolling Fair-Value Line That Centers the Recent Range
The Midpoint Price (MIDPRICE) takes the highest high and lowest low over the last N periods and plots their exact average – the true center of the recent price envelope. It's a dynamic 'fair-value' gauge that reveals where the market has been balancing out, ignoring close bias and focusing purely on the range core. Price trading in the upper half signals buyer dominance; lower half means sellers rule. Simple, zero-lag, and incredibly useful for spotting equilibrium, supporting breakouts, or fading extremes in ranges.
The Clean Formula
Pure and straightforward:
MIDPRICE = \frac{\text{Highest High (N)} + \text{Lowest Low (N)}}{2}
N = look-back length (14 classic).
Updates every bar – rolling fair-value centerline.
Reading Price vs MIDPRICE
Market insights:
- Price > rising MIDPRICE: Trading upper half – buyers absorbing supply.
- Price < falling MIDPRICE: Lower half – sellers in control.
- Price oscillating around MIDPRICE: Balanced range – mean reversion zone.
- MIDPRICE climbing: Range drifting higher – underlying bullish bias.
- MIDPRICE flat: Horizontal equilibrium – consolidation likely.
- Sharp MIDPRICE bend: Range expansion/contraction – volatility shift alert.
Parameter Choices
N tunes the horizon:
- Short (5–10): Snappy – intraday micro swings.
- Medium (14–30): Balanced – daily swing sweet spot.
- Long (50–100+): Smooth macro fair-value – position trades.
Guideline: N ≈ your target cycle (20 ≈ one trading month).
Pro Trading Applications
Practical roles:
- Range mapping: Centerline inside Donchian/ATR channels.
- Breakout filter: Only trade breaks staying on 'right' side of MIDPRICE.
- Dynamic pivot: Rolling S/R for intraday or swing levels.
- Stop management: Trail buffer below rising MIDPRICE (vice-versa short).
- Indicator input: Feed MIDPRICE into RSI/Stoch for noise-reduced swings.
Strategy Sketches
Quick setups:
- Range fade: Flat MIDPRICE → buy near lower band, target MIDPRICE.
- Break-retest: Break upper band → wait pullback holding above MIDPRICE → enter.
- Trend confirmation: Price + MIDPRICE both above rising EMA → strong long bias.
Volatility compression: Range width shrinking + flat MIDPRICE → breakout prep.
Strengths and Limitations
The Wins
- Zero-lag range center – instant equilibrium read.
- Simple, visual, works everywhere.
- Powerful in range trading and breakout systems.
- Great companion to channel indicators.
The Gotchas
- Sensitive to single outlier spikes.
- Flat in strong uni-directional trends.
- No direction alone – needs price context.
- Not volume-aware.
Your MIDPRICE Checklist
- Set N to your trading cycle.
- Overlay with high/low bands for full envelope.
- Backtest bounce and retest rules.
- Add trend/volume filters.
- Alert on MIDPRICE slope changes or price crosses.
- Review N in different volatility regimes.
Key Takeaways
MIDPRICE = average of highest high and lowest low over N – rolling fair-value center.
Price above = bullish range control, below = bearish.
Dynamic pivot for ranges, breakouts, and stop trailing.
Simple equilibrium line – shows hidden bias in swings.
Find the middle, trade the edges – keep your strategy centered and sharp. Stay fair and trade strong!
Midpoint Price (MIDPRICE)
The Rolling Fair-Value Line That Centers the Recent Range
The Midpoint Price (MIDPRICE) takes the highest high and lowest low over the last N periods and plots their exact average – the true center of the recent price envelope. It's a dynamic 'fair-value' gauge that reveals where the market has been balancing out, ignoring close bias and focusing purely on the range core. Price trading in the upper half signals buyer dominance; lower half means sellers rule. Simple, zero-lag, and incredibly useful for spotting equilibrium, supporting breakouts, or fading extremes in ranges.
Table of Contents
The Clean Formula
Pure and straightforward:
MIDPRICE = \frac{\text{Highest High (N)} + \text{Lowest Low (N)}}{2}
N = look-back length (14 classic).
Updates every bar – rolling fair-value centerline.
Reading Price vs MIDPRICE
Market insights:
- Price > rising MIDPRICE: Trading upper half – buyers absorbing supply.
- Price < falling MIDPRICE: Lower half – sellers in control.
- Price oscillating around MIDPRICE: Balanced range – mean reversion zone.
- MIDPRICE climbing: Range drifting higher – underlying bullish bias.
- MIDPRICE flat: Horizontal equilibrium – consolidation likely.
- Sharp MIDPRICE bend: Range expansion/contraction – volatility shift alert.
Parameter Choices
N tunes the horizon:
- Short (5–10): Snappy – intraday micro swings.
- Medium (14–30): Balanced – daily swing sweet spot.
- Long (50–100+): Smooth macro fair-value – position trades.
Guideline: N ≈ your target cycle (20 ≈ one trading month).
Pro Trading Applications
Practical roles:
- Range mapping: Centerline inside Donchian/ATR channels.
- Breakout filter: Only trade breaks staying on 'right' side of MIDPRICE.
- Dynamic pivot: Rolling S/R for intraday or swing levels.
- Stop management: Trail buffer below rising MIDPRICE (vice-versa short).
- Indicator input: Feed MIDPRICE into RSI/Stoch for noise-reduced swings.
Strategy Sketches
Quick setups:
- Range fade: Flat MIDPRICE → buy near lower band, target MIDPRICE.
- Break-retest: Break upper band → wait pullback holding above MIDPRICE → enter.
- Trend confirmation: Price + MIDPRICE both above rising EMA → strong long bias.
Volatility compression: Range width shrinking + flat MIDPRICE → breakout prep.
Strengths and Limitations
The Wins
- Zero-lag range center – instant equilibrium read.
- Simple, visual, works everywhere.
- Powerful in range trading and breakout systems.
- Great companion to channel indicators.
The Gotchas
- Sensitive to single outlier spikes.
- Flat in strong uni-directional trends.
- No direction alone – needs price context.
- Not volume-aware.
Your MIDPRICE Checklist
- Set N to your trading cycle.
- Overlay with high/low bands for full envelope.
- Backtest bounce and retest rules.
- Add trend/volume filters.
- Alert on MIDPRICE slope changes or price crosses.
- Review N in different volatility regimes.
Key Takeaways
MIDPRICE = average of highest high and lowest low over N – rolling fair-value center.
Price above = bullish range control, below = bearish.
Dynamic pivot for ranges, breakouts, and stop trailing.
Simple equilibrium line – shows hidden bias in swings.
Find the middle, trade the edges – keep your strategy centered and sharp. Stay fair and trade strong!
Related Terms
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