Is The Average Analyst Average-Aware? by John Cameron
Such a simple term, yet easy to misinterpret. Here, we clarify the differences between mean, median, and mode.
Technical analysts should be aware that the mean is not the only average employed in this field. The point & figure “average” connects column medians. Ichimoku clouds are also based on medians. There are many more examples.
To most, the word “average” is the usual way of expressing a central tendency, which is itself described in many ways: a typical value, a representative value, a central value, one value to describe a set of data. The last is the clearest. The one that is least immediately clear is the central value, as it is shorthand for the central or middle value in a frequency distribution of a set of values. When put this way, it is a definition of one of the three ways of finding a central tendency...