VWAP Alerts

The VWAP Alerts indicator provides a comprehensive intraday Volume Weighted Average Price (VWAP) framework designed for identifying potential price bounces and mean reversion opportunities using multiple standard deviation bands.

Usage

The Usage section focuses on monitoring price action relative to the central VWAP line and its surrounding deviation bands. Traders typically use this tool for:

• Intraday Bounces: Watching for price stabilization or reversals near the central VWAP or the first set of deviation bands.
• Mean Reversion: Identifying "overbought" or "oversold" conditions when price enters the outer deviation bands (e.g., bands 3, 4, or 5), suggesting a potential return to the mean.
• Trend Identification: Using bar coloring to determine market sentiment; for instance, candles turning green in lower deviation zones or red in upper deviation zones can signal potential exhaustion.
• Alerting: The script includes built-in alert conditions for crosses with the VWAP and various deviation levels, allowing users to stay informed of key price touches without constant monitoring.

Details

The indicator calculates a standard intraday VWAP that resets at the start of every daily session. In addition to the mean price, it computes up to five levels of standard deviation bands. These bands are calculated based on the variance of price relative to the volume-weighted average. The script also includes a feature to display the previous session's VWAP close, providing a historical reference point for the current day's price action.

Settings

• Stdev above/below (1-5): Adjusts the multiplier for each of the five standard deviation levels.
• Turn Barcolor ON/OFF?: Enables or disables the logic that changes candle colors based on their position relative to the bands.
• Show second/third/fourth/fifth group of bands?: Toggles the visibility of the outer deviation levels to declutter the chart.
• Show previous VWAP close: Displays a series of circles representing the final VWAP value from the prior session.
• Color Source: Determines which price point (Close, High, Low, etc.) is used for the bar coloring logic.
• Alert Source: Determines which price point is used to trigger the crossunder alerts.

FAQ

How do I use the bar colors?

Bar colors are designed to highlight specific zones. Typically, prices in the lower deviation bands will color green to indicate potential buy interest, while prices in the upper bands may color red to indicate selling pressure.

Can I change the deviation multipliers?

Yes, all five levels of standard deviation can be customized in the settings menu to fit specific assets or volatility profiles.

How can I access VWAP Alerts?

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