Bollinger Bands Scalper + VWAP

The Bollinger Bands Scalper + VWAP indicator provides a comprehensive toolkit for short-term scalping by combining multi-deviation Bollinger Bands, an anchored VWAP, and a trend-following moving average.

Usage

This tool is designed to identify potential mean reversion and trend-continuation opportunities. Traders can use the three layers of Bollinger Bands (defaulted to 1, 2, and 3 standard deviations) to gauge price exhaustion. In many scalping strategies, the outer bands act as dynamic resistance or support, while the inner bands represent zones of typical price action.

The Trendicator serves as a visual filter. When the circles are green, the short-term momentum is upward; when red, it is downward. This helps traders align their scalps with the prevailing trend.

The VWAP component includes up to three standard deviation bands and multiple anchor periods (such as Session, Week, or Month). This allows users to identify institutional supply and demand levels. For example, a common scalp involves looking for price to reject the 2nd or 3rd VWAP deviation while the Bollinger Bands also signal overextension.

Details

The script integrates three distinct technical components:

1. Trendicator: A customizable moving average (SMA, EMA, HMA, WMA, or VWMA) that changes color based on its slope. It is plotted as circles to provide a clear, non-intrusive trend signal.
2. Volume Weighted Average Price (VWAP): Unlike standard VWAP tools, this implementation allows for custom anchoring (e.g., Earnings or Dividends) and provides three configurable deviation bands to identify extreme price levels relative to volume.
3. Stacked Bollinger Bands: Three independent Bollinger Band calculations are overlaid. This creates a "cloud" effect that visualizes the distribution of price volatility, making it easier to spot "walking the bands" or mean reversion setups.

Settings

Trendicator Settings

• Trendicator Length: The lookback period for the trend average.
• Trendicator Source: The price input used for calculations (default is Close).
• Trendicator Type: Selects the moving average method: 1=SMA, 2=EMA, 3=HMA, 4=WMA, 5=VWMA.

VWAP Settings

• Hide VWAP on 1D or Above: Toggles visibility on higher timeframes to keep charts clean.
• VWAP Anchor Period: Sets the reset point for VWAP (e.g., Session, Week, Month, or even Earnings).
• VWAP Bands Multiplier: Sets the standard deviation distance for the three VWAP bands.

Bollinger Bands (1, 2, and 3) Settings

• BB Length: The lookback period for the standard deviation and basis.
• BB StdDev: The multiplier for the band width (defaulted to 1.0, 2.0, and 3.0).
• BB Offset: Shifts the bands forward or backward in time.

FAQ

How do I use the purple clouds for trading?

The "purple clouds" represent the areas between different Bollinger Band deviations. Prices staying within the inner cloud suggest low volatility, while moves into the outer clouds suggest high-velocity price action or potential reversal zones.

What is the Trendicator?

The Trendicator is a dynamic moving average that changes color based on whether it is rising (green) or falling (red), helping you quickly identify the current trend direction without complex analysis.

How can I access this tool?

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