VWAP angle Trend

The VWAP angle Trend indicator provides valuable insights into the momentum and potential reversal points of the Volume Weighted Average Price (VWAP) by calculating its angular velocity. This tool helps traders identify overextended market conditions where the VWAP movement is likely to stall or reverse.

Usage

The VWAP angle Trend can be used to gauge the strength and direction of the market trend relative to the VWAP. When the angle value increases, it suggests strong upward momentum; conversely, a decreasing angle indicates strong downward momentum.

Traders can use the specific threshold levels to identify potential trade setups:

• Overbought (Above 65): When the angle exceeds 65, it indicates that the VWAP is rising at an aggressive rate, suggesting a higher likelihood of a bearish trend reversal or exhaustion.
• Oversold (Below -65): When the angle drops below -65, it suggests the VWAP is declining rapidly, signaling a potential bullish trend reversal or selling climax.

The indicator is displayed in a separate pane with a gradient line and colored zones to highlight these extreme momentum areas.

Details

The script calculates the angle by taking the difference between the current VWAP value and its value at a specific lookback period. To ensure the angle is consistent across different assets and timeframes, the calculation is normalized using the Average True Range (ATR).

The formula utilizes the arctangent function (math.atan) to convert the price change over time into a degree-based value, which is then clamped between -100 and 100 for better visualization. This approach allows for a standardized interpretation of "steepness" regardless of the asset's price level.

Settings

➞ Main Core Settings 🔸

• Source: The price data used to calculate the underlying VWAP (typically hlc3).
• LookBack: The number of bars back to compare the current VWAP against to determine the angle.
• ATR Period: The period used for the Average True Range normalization, affecting how sensitive the angle is to volatility.

FAQ

How do I access the VWAP angle Trend?

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

What are the main reversal zones?

The primary reversal zones are identified when the angle crosses above 65 (overbought) or below -65 (oversold).

Can I change the sensitivity of the indicator?

Yes, by adjusting the "LookBack" and "ATR Period" settings, you can make the angle more or less responsive to recent price fluctuations.