Quant VWAP System 3.8

The Quant VWAP System 3.8 indicator provides a statistical oscillator designed to measure the significance of price movements relative to the Volume Weighted Average Price (VWAP) using Z-Score normalization. This tool helps traders identify overextended market conditions and volatility compression zones across various asset classes like Forex, Stocks, and Crypto.

Usage

The indicator functions as a lower-chart oscillator that normalizes price action into Standard Deviations (SD).

• Overbought/Oversold Identification: The ±2.0 SD levels serve as "Kill Zones." When the oscillator line exceeds +2.0, the asset is statistically expensive; conversely, falling below -2.0 indicates the asset is statistically cheap.
• The Squeeze Radar: Yellow dots on the center line indicate a "Squeeze" where volatility is compressing. This suggests energy is building for a potential breakout. Traders often avoid mean-reversion trades during these periods and wait for the dots to disappear to confirm a trend expansion.
• Momentum Coloring: The signal line changes color based on the Z-Score trajectory. A green line indicates rising bullish momentum, while a red line indicates falling bearish momentum. This is useful for identifying momentum-price divergences.

Details

The script utilizes a Z-Score algorithm to normalize price action, focusing on statistical deviation rather than absolute dollar value. By calculating how many standard deviations the current price is from the mean (VWAP), the indicator provides a consistent scale for assessing market extremes.

It also includes multiple squeeze detection models:

• Smart Hybrid (Universal): Combines classic volatility ratios with extreme Z-Score readings.
• Classic Ratio (Scalping): Focused on tight volatility bands suitable for short-term trading.
• Quant Z-Score (Swing): Uses statistical deviations to identify broader consolidation phases.

Settings

Squeeze Engine

• Squeeze Model: Selects the calculation method (Smart Hybrid, Classic Ratio, or Quant Z-Score).
• Lookback: Sets the period for calculating the squeeze baseline.
• Quant Threshold (Sigma): Adjusts the Z-Score sensitivity for the Quant squeeze model.
• Classic Threshold (Ratio): Adjusts the sensitivity for the Classic Ratio squeeze model.
• Min Squeeze Bars: Filters out noise by requiring a minimum number of consecutive squeeze dots before displaying.

Visual Styling

• Price Length: Sets the period for the core VWAP and Standard Deviation calculations.
• Colors (Bull/Bear Strong/Weak): Customizes the 4-state momentum coloring logic.
• Squeeze Dot/Zero Glow: Adjusts the appearance of the volatility indicators and the center line.

FAQ

How do I interpret the yellow dots?

The yellow dots represent a period of low volatility or "Squeeze." This typically precedes a significant move. It is often used as a warning to stop trading mean-reversion and prepare for a breakout.

What does a "Zero Bounce" signal mean?

A Zero Bounce occurs when the oscillator pulls back to the zero line (representing the mean) and then resumes its previous trend. This suggests that the price has successfully tested the VWAP and momentum is re-entering.

How can I access Quant VWAP System 3.8?

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