Anchored VWAP Hand-Off

The Anchored VWAP Hand-Off indicator automates the process of trailing dynamic volume-weighted average price levels by initiating new anchored VWAPs each time price interacts with a preceding one.

Usage

The indicator is designed to identify trend continuation and potential pivot points through consecutive VWAP layers. Users can anchor the primary VWAP to a specific significant event—such as a high, low, or news event—using the interactive "confirm=true" input.

When price (tracked by a 1-period EMA trigger) crosses the primary Anchored VWAP, a second VWAP calculation begins at that specific candle. If price subsequently crosses the second VWAP, a third is plotted, and so on.

• Trend Identification: In a strong trend, the VWAPs will appear orderly and provide clear support or resistance levels.
• Range Detection: If the "Hand-Off" lines appear messy or clustered, it indicates choppy price action where a definitive trend has not yet established.
• Alerts: The script includes an alert that triggers whenever a "Hand-Off" event occurs (a cross with any active VWAP layer).

Details

This tool is based on the "VWAP hand off" strategy popularized by Brian Shannon. The technical implementation involves a cascading calculation where the terminal point of one VWAP serves as the anchor point for the next.

The primary logic uses a fast EMA (length 1) of the source price to determine the exact moment of a crossover or crossunder. Upon this trigger, the cumulative source and volume variables are reset for the subsequent layer, creating a series of dynamic support and resistance zones that evolve with market participants' average cost basis.

Settings

• Start Calculation Date: Determines the anchor point for the first VWAP in the series.
• Source: Specifies the price source used for the VWAP calculations (e.g., Close, Low, HL2).
• Transparency: Adjusts the visibility of the VWAP plots on the chart.

FAQ

How do I use the Anchored VWAP Hand-Off?

Select the indicator and click on the specific candle on your chart where you want the initial calculation to begin. The indicator will then automatically plot subsequent hand-off levels as price interacts with them.

What does it mean when many lines are close together?

When the VWAP lines are tightly bunched, it suggests price is oscillating around a mean without clear directional volume, indicating a sideways or choppy market.

How can I access the Anchored VWAP Hand-Off?

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