Vwap Salvatierra

The Vwap Salvatierra indicator is a specialized Volume Weighted Average Price tool designed to provide long-term trend analysis and volatility-based support and resistance levels. It enhances traditional VWAP analysis by incorporating multiple standard deviation bands and the ability to track previous value areas across various anchor periods, ranging from sessions to decades.

Usage

The tool is primarily used to identify overextended price conditions and potential mean reversion opportunities. Users can apply the following strategies:

• Mean Reversion: When the price reaches or exceeds the third standard deviation band (DVA+3 or DVA-3), it suggests an overextended state. Traders may look for short positions at the upper band or long positions at the lower band, targeting a return to the central VWAP line.
• Support & Resistance: Observe how price interacts with the VWAP line. If the price fails to break above the VWAP after multiple attempts, it may be acting as a strong resistance level (bearish). Conversely, if it holds above the VWAP as support after multiple tests, it indicates a potential bullish continuation.
• Previous Zones: By enabling "Show Previous ZONES," traders can visualize the VWAP and bands from the previous period, helping to identify historical value areas that may act as future pivots.

Details

The script calculates VWAP using a cumulative sum of price multiplied by volume, divided by the cumulative volume starting from a specific anchor point. Standard deviations are calculated automatically based on the variance within the selected period. Unlike standard VWAP tools, this implementation includes:

• Custom Anchoring: Supports Session, Week, Month, Quarter, Year, Half Decade, and Decade anchors.
• Dynamic Middle Points: Automatically plots circular mid-points between bands (e.g., 0.5 and 1.5 deviations) to provide more granular levels of interest.
• Multi-Band Structure: Displays up to three levels of standard deviation bands (DVA, DVA+2, DVA+3).

Settings

VWAP Settings

• Anchor Period: Defines the timeframe when the VWAP calculation resets (e.g., Session, Week, Year).
• Source: The price data used for calculation (default is HLC3).
• Hide VWAP on 1D or Above: When enabled, the indicator will not display on daily timeframes or higher to maintain chart clarity.

Standard Deviation Bands Settings

• Calculate Bands: Toggles the visibility of the standard deviation bands.
• Show Previous ZONES: Displays the VWAP, High, and Low bands from the prior anchor period.
• DVA (1, 2, 3): Adjusts the multipliers for the first, second, and third sets of standard deviation bands.

FAQ

How do I interpret the circular points between bands? These represent the mid-points between the standard deviation levels (e.g., the 0.5 or 1.5 level), serving as additional micro-levels for price reaction.

Can I use this for long-term investing? Yes, by selecting "Year" or "Decade" anchor periods, you can identify long-term value zones for various assets.

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