VWAP/MVWAP/SMA CROSSOVER

The VWAP/MVWAP/SMA CROSSOVER indicator is a trend-following tool that combines volume-weighted moving averages with standard simple moving averages to identify potential market momentum shifts and entry opportunities.

Usage

The indicator focuses on the relationship between price action and multiple moving average filters. A bullish trend is identified when the VWAP (thick yellow line) and two SMAs (orange and thin yellow) cross above the MVWAP (purple line). Conversely, a bearish trend is suggested when these three lines cross below the MVWAP.

The tool includes RSI-based filtering to categorize signal quality:

• Long Entry: Triggered when the price is trending upwards relative to the MVWAP.
• Great Buy: A high-conviction signal where the RSI is above the minimum threshold (51) but below the limit (65), suggesting a trend starting with room to grow.
• Wait: A signal where the RSI is below the minimum threshold, suggesting the user should wait for a better entry or "dip".
• Risky: A signal where the RSI is above the limit, indicating the market may be overextended.

Details

The script utilizes a Moving Volume Weighted Average Price (MVWAP), which is calculated as a simple moving average of the standard VWAP. By comparing shorter-term SMAs and the current VWAP against this smoothed MVWAP baseline, the indicator seeks to filter out minor price noise. Additionally, it incorporates a volume-weighted "Cloud" component (similar to Ichimoku principles) to provide visual context for support and resistance zones.

Settings

Variables & Inputs

• VWAP Length: Sets the smoothing length for the VWAP component.
• SMA 1 Source: Determines the price source (e.g., Close) for the first SMA.
• SMA 1 Length: Sets the period for the first SMA (default 7).
• SMA 2 Source: Determines the price source for the second SMA.
• SMA 2 Length: Sets the period for the second SMA (default 25).
• RSI Limit (RISKY): The RSI level above which a buy signal is considered overextended.
• RSI Minimum (WAIT FOR DIP): The RSI level required to confirm a high-probability "Great Buy" signal.
• MVWAP Length: Sets the period used to calculate the Moving Volume Weighted Average Price.

FAQ

Does the indicator repaint?

No, the indicator is based on standard moving average and RSI calculations which do not repaint once the bar has closed.

On which timeframe is this most effective?

While the script was originally designed with the 15-minute chart in mind, the settings are fully adjustable to accommodate different trading styles and timeframes.

How can I access this script?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.