Open-Close Average (OC2)
A simple average of the Open and Close prices.
Usage
Use to reduce noise in technical indicators. Based on John Ehlers' recent research, averaging the open and close can significantly improve signal-to-noise ratios in DSP-based indicators.
Background
In his 2023 paper 'Every Little Bit Helps', John Ehlers demonstrates that using the average of the Open and Close as an input can enhance the performance of various filters and oscillators by providing a cleaner signal with reduced aliasing. — John Ehlers
Formula
\[
OC2 = \frac{Open + Close}{2}
\]