VWAP/MVWAP/EMA CROSSOVER

The VWAP/MVWAP/EMA CROSSOVER indicator provides a trend-following system that combines volume-weighted price action with exponential moving averages to identify potential trend reversals and momentum shifts.

Usage

The Usage section focuses on identifying trend direction through the convergence and divergence of four primary lines: the VWAP, the Moving Volume Weighted Average Price (MVWAP), and two Exponential Moving Averages (EMA).

• Uptrend Identification: A bullish trend is indicated when the VWAP and both EMAs (EMA 1 and EMA 2) cross above the MVWAP. This alignment suggests that short-term and medium-term price momentum, weighted by volume, is trending upward relative to the average.
• Downtrend Identification: A bearish trend is indicated when the VWAP and both EMAs cross below the MVWAP.
• Entry Filtering: The tool uses RSI levels to categorize the strength of a signal. "Great Buy" signals occur when the crossover happens while the RSI is between the defined minimum and maximum limits, suggesting the move is not yet overextended. "Risky" signals appear if the crossover occurs while the RSI is above the limit, indicating a possible overbought condition.
• Visual Aids: The indicator includes a cloud based on volume-weighted high/low calculations to provide additional support and resistance context. Bar coloring reflects the current signal state (bullish vs. bearish).

Details

The script utilizes a combination of volume and time-based averages. The MVWAP is calculated as an EMA of the standard VWAP, providing a smoother baseline for trend detection. The primary crossover logic requires three conditions to be met: the first EMA, the second EMA, and the smoothed VWAP must all be on the same side of the MVWAP baseline.

Additionally, the script incorporates a custom "cloud" component. This calculation determines the volume-weighted average of highs and lows over specific periods to create Senkou-style spans (A and B), displaced forward to offer a prospective view of potential support or resistance zones.

Settings

• VWAP Length: Sets the period for the primary Volume Weighted Average Price calculation.
• EMA 1 Source/Length: Determines the price source and lookback period for the first exponential moving average (fast).
• EMA 2 Source/Length: Determines the price source and lookback period for the second exponential moving average (slow).
• RSI Limit (RISKY): The upper threshold for RSI; signals occurring above this level are marked as risky.
• RSI Minimum (WAIT FOR DIP): The lower threshold for RSI; signals occurring below this level suggest waiting for a pullback.
• MVWAP Length: Sets the smoothing period for the Moving Volume Weighted Average Price baseline.

FAQ

Does the indicator repaint? No, the indicator is based on standard moving averages and volume-weighted calculations that use closed bar data, ensuring that signals remain fixed once the bar closes.

What timeframe is this script optimized for? The script was originally developed with the 15-minute chart in mind, though the settings are fully adjustable to accommodate different trading styles and timeframes.

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