VWAP Valuation Model | JeffreyTimmermans

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VWAP Valuation Model

This indicator provides a powerful tool for traders looking to assess the value of an asset based on the VWAP (Volume Weighted Average Price) and the z-score. The VWAP Valuation Model is designed to give insights into the overbought or oversold condition of an asset by comparing the current price to a volume-weighted average over a defined period.

Key Features:

• VWAP Baseline: The indicator calculates a volume-weighted moving average of the price, which serves as the core reference line for price analysis.
  
• Z-Score: The z-score is calculated to determine how far the current price deviates from the mean, adjusted for volatility. This score helps identify overbought and oversold conditions.
  
• Smoothing Option: Optionally, the indicator can be smoothed for better visualization, with the smoothing length being adjustable.
  
• Real-time Data: The indicator provides real-time insights for multiple assets, such as Bitcoin (BTCUSD), Ethereum (ETHUSD), and Solana (SOLUSD), and can take the broader market performance (like the total crypto market) into account.
  
• Z-Score Table: The indicator features an interactive table that provides valuable information on the z-scores of selected assets, allowing traders to quickly get an overview of market conditions. The table is strategically positioned above the chart for maximum visibility without interfering with the chart data.
  

Usage:

• Overbought/Oversold: A z-score above +1.5 indicates overvaluation (overbought), while a score below -1.5 indicates undervaluation (oversold). This indicator helps in making informed trading decisions.
  
• VWAP Range: The indicator offers a visual representation of the VWAP range, crucial for understanding price trends and market dynamics.
  

This indicator is ideal for investors interested in fundamental analysis while also needing technical insights to identify buy and sell opportunities. It helps to objectively assess market valuation and make well-informed decisions.

Important Note: This indicators works only in mean-reverting markets, not trending periods.

-Jeffrey