Options Series - Anchored VWAP Ribbon

kelmarin

➤ AVWAP On different chart symbols:





⭐ Overview and Key Features:
Anchored VWAP Calculation:
The script implements the Anchored Volume Weighted Average Price (AVWAP), a tool used by professional traders to identify key price levels weighted by volume, starting from a specific timestamp (anchor point).

Bullish and Bearish Analysis:
It determines the dominance of bullish or bearish momentum based on the relationship between the close price and AVWAP levels across multiple time points.

Dynamic Visualization:
The background of the chart changes color based on overall bullish or bearish sentiment, making it easier to interpret market trends.

Multi-Time Anchors:
By defining multiple anchor points (e.g., 09:15, 09:20), the script calculates a series of AVWAP values for fine-grained intraday analysis.

Customizable Inputs:
Users can select the source price (e.g., hlc3), date, and time for AVWAP calculation.


⭐ How It Works and Functionality:
AVWAP Logic:
Uses the timestamp() function to establish a reference (anchor point).
Calculates the cumulative weighted price (price * volume) and cumulative volume from this anchor point.
The ratio of these sums gives the AVWAP, which updates dynamically with new bars.

Bullish and Bearish Signals:
Binary flags (1 or 0) are set for each time point depending on whether the closing price is above or below the AVWAP for that time.
Aggregates these flags into AVWAP_bull and AVWAP_bear to represent the overall market sentiment.

Decision Logic:
Determines final market conditions (bullish or bearish dominance) based on aggregated scores.
Visual feedback (background and bar colors) is applied accordingly.


⭐ Visualizations and User Experience:
Background Colors:
Green or red background highlights the overall sentiment (bullish or bearish), providing a quick market overview.

Bar Coloring:
Bars are color-coded based on bullish, bearish, or neutral conditions, making it easier to identify trends directly on the chart.

AVWAP Levels:
The calculated AVWAP values are plotted as colored lines for each anchor point, giving precise intraday levels of significance.
Bright colors (fluorescent green/red) are used for additional clarity when the close price is above or below these levels.


🎨 Settings and Customization:
Anchor Point:
Fully customizable anchor points allow users to set specific dates and times (e.g., 09:15 on December 13, 2024) for AVWAP calculations.

Source Price:
Users can choose from hlc3, close, or any other price source to calculate the AVWAP, tailoring the indicator to their strategy.

Visual Appearance:
The transparency, colors, and line styles are adjustable, enabling users to customize the chart to match their trading preferences.

Dynamic Signals:
The script accommodates numerous AVWAP levels, providing flexibility for scalpers and swing traders alike.


⭐ Uniqueness of the Concept:
Precise Intraday Analysis:
Unlike static VWAP, this script allows anchoring to specific times during the day, offering granular insights into market behavior.

Cumulative Sentiment Approach:
Aggregates signals across multiple time intervals, providing a comprehensive view of intraday momentum rather than a single-point reference.

Blending AVWAP with Visual Feedback:
Combines traditional AVWAP calculations with visually impactful features like background shading and bar coloring to enhance decision-making.

Scalability:
Supports adding multiple additional anchor points and customization for broader applicability in different market conditions.

🚀 Conclusion:

The Anchored VWAP Ribbon script is a powerful tool for traders seeking to analyze price behavior relative to volume-weighted levels anchored at specific times. It provides a visually intuitive way to assess intraday market sentiment, combining traditional technical indicators with customizable visualization features. The script’s flexibility makes it suitable for a variety of trading styles, from scalping to swing trading, while its unique cumulative sentiment logic sets it apart from conventional VWAP tools.